CIMA Exam CIMAPRA19-F02-1 Topic 5 Question 95 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 95
Topic #: 5

On 1 January 20X4 EF grants each of its 125 employees500 share options on the condition that they remain in employment for 3 years. During the year to 31 December 20X4 10 employees left and It is expected that a further 25 will leave before the end of the vesting period.

The fair value of each shareoption is $30 on 1 January 20X4 and $45 on 31 December 20X4.

What is the journal entry in respect of these share options in EF's financial statements for the year ended 31 December 20X4?

AOption

BOption

COption

Show Suggested Answer

Suggested Answer: A

by Isadora at Aug 24, 2024, 10:51 PM

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Alecia

5 months ago

Ah, the classic 'share options' question. I bet the answer is hidden in the fine print somewhere. Or maybe it's just a test to see if we can stay awake for the whole exam. I'll take Option C, it's the most nap-inducing choice.

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Kerry

4 months ago

Let's go with Option C then, it's a safe bet.

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Tenesha

4 months ago

I agree, Option C seems like the most likely choice.

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Janey

5 months ago

I think the journal entry for the share options is Option C.

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Nu

5 months ago

This question is making my head spin. I'm just going to close my eyes and point at an answer. Eeny, meeny, miny, moe, Option B it is!

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Aliza

5 months ago

I believe we should adjust the fair value to reflect the current market value of the share options.

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Lou

5 months ago

Okay, let's think this through. If 10 employees left and 25 more are expected to leave, that means 90 employees will actually receive the options. I'll go with Option A, it seems to fit the scenario best.

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Gwen

4 months ago

I also believe Option A is the most suitable journal entry based on the information provided.

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Kip

4 months ago

Option A makes sense considering the number of employees who will actually receive the options.

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Thea

4 months ago

Yes, I think Option A is the correct journal entry for this scenario.

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Zack

4 months ago

I agree, Option A seems like the most appropriate choice given the situation.

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Simona

5 months ago

Do you think we should adjust the fair value of the share options as it changes over time?

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Rikki

5 months ago

Wait, what? Are we expected to do math on this exam? I thought we were just going to stare at the options and pick one. I'm going with C, it's the shortest one.

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