Accounting for Share Based Payments (ESOS & ESOP) – Corporate and Management Accounting MCQ

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Underwriting of Shares & Debentures – Corporate and Management Accounting MCQ

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A company has its share capital divided into shares of ₹ 10 each. On 1.4.2018, it granted 5,000 shares as employee stock options at ₹ 40 per share, when the market price was ₹ 130 per share. The options were to be exercised between 16.12.2018 and 15.3.2019. The employees exercised their options for 4,500 shares only; the remaining options lapsed. Which of the following is correct?

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On 1.4.2019, GP Ltd. offered 100 shares to each of its 500 employees at ₹ 50 per share. Employees are given a year to accept the offer. Shares issued under the plan shall be subject to lock-in on transfer for 3 years from the grant date. The market price of shares on the grant date is ₹ 60 per share. Due to post-vesting restrictions on transfer, the fair value of shares issued under the plan is estimated at ₹ 56 per share. On 31.3.2020,400 employees accepted the offer and paid ₹ 50 per share, (a) Expenses to be recognized = ? & (b) Securities Premium A/c will be credited by =?

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A company has its share capital divided into shares of ₹ 10 each. On 1.1.2016, it granted 5,000 employees stock option at ₹ 50, when the market price was ₹ 140. The options were to be exercised between 1.3.2017 to 31.3.2017. The employees exercised their options for 4,800 shares only; the remaining options lapsed. How much amount will be transferred from Employees Compensation Expenses A/c to Profit & Loss A/c?

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X Ltd. has its share capital divided into equity shares of ₹ 10 each. On 1.1.2020 it granted 20,000 employees stock option at ₹ 50 per share when the market price was ₹ 120 per share. The options were to be exercised between 15.3.2020 & 31.3.2020. The employees exercised their options for 16,000 shares only and the remaining options lapsed. The company closes its books on 31st March every year. Which of the following is correct?

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On 1.4.2019, a company offered 300 shares to each of its 1,200 employees at ₹ 75 per share. The employees are given a month to accept the shares. The shares issued under the plan shall be subject to lock-in to transfer for 3 years from the grant date Le. 30.4.2019. The market price of shares on the grant date is ₹ 90 per share. Due to post vesting restrictions, the fair value of shares issued under the plan is estimated at ₹ 84 per share. Up to 30.4.2019,50% of employees accepted the offer and paid ₹ 75 per share. The face value of the share is ₹ 10. Expenses to be recognized in the year 2019-2020 =?

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A company may implement share-based employees benefit schemes:

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____means the process by which the company issues Options, SARs, Shares, or any other benefits under any of the schemes.

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______means the price, if any, payable by the employee for exercising the option or SAR granted to him.

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Shares to be issued under ESOS

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Under ESOS,____ employees are given an option to purchase shares at:

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Under ESPS employees are given an option to purchase shares on the spot at a

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Under the employees are given an option to purchase shares on the spot at a discount price.

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SEBI (Share Based Employee Benefits) Regulations, 2014 applies to:(1) Employee Stock Option Schemes(2) Employee Stock Purchase Schemes(3) Stock Appreciation Rights Schemes(4) General Employee Benefits Schemes(5) Retirement Benefit Schemes

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Which of the following person can be treated as ‘employee’ and hence eligible for employees’ share-based payment benefits?

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As per Rule 12 of the Companies (Share Capital & Debentures) Rules, 2014, ’employee’ includes(I) A permanent employee of the company who has been working outside India(II) Independent director(III) An employee who is a promoter(IV) Whole-time director(V) Director who holds more than 10% of the outstanding equity shares of the start-up company

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Which of the following persons is covered under the provisions relating to share-based payment regulation made by the SEBI?

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A listed company can offer various benefits to employees such as ESOS or ESPS by complying with provisions of the(1) Companies Act, 2013(2) SEBI (Share Based Employee Benefits) Regulations, 2014(3) Companies (Share Capital & Debentures) Rules, 2014Select the correct answer from the options given below.

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As per Section 62(2) of the Companies Act, 2013, a company can offer shares to employees under a scheme of employees stock option bypassing

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Which of the following section of the Companies Act, 2013 allows a company to offer shares to employees under a scheme of employee’s stock option?

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______means the option given to the whole-time directors, officers or employees of a company, which gives such directors, officers, or employees the benefit or right to purchase or subscribe at a future date, the securities offered by the company at a pre-determined price.

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