On December 31, 2016, Carla Company issues 170,000 stock-appreciation rights to its officers entitling them to receive cash for the difference between the market price of its stock and a pre-established price of $8. The fair value of the SARs is estimated to be $4 per SAR on December 31, 2017; $1 on December 31, 2018; $8 on December 31, 2019; and $6 on December 31, 2020. The service period is 4 years, and the exercise period is 7 years.
Part 1
Prepare a schedule that shows the amount of compensation expense allocable to each year affected by the stock-appreciation rights plan. (If the compensation decreases from prior year enter the amount as a negative number in the table e.g. -25,000 or (25,000).)
Date |
Fair Value |
Cumulative Compensation Recognizable |
Percentage |
Compensation |
Expense |
Expense |
Expense |
Expense |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
12/31/17 |
$enter a dollar amount |
$enter a dollar amount |
enter percentages |
% |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
||||||||
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
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12/31/18 |
enter a dollar amount |
enter a dollar amount |
enter percentages |
% |
enter a subtotal of the two previous amounts |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
||||||||
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
|||||||||||||
12/31/19 |
enter a dollar amount |
enter a dollar amount |
enter percentages |
% |
enter a subtotal of the two previous amounts |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
enter a dollar amount |
||||||||
enter a total of the two previous amounts |
enter a total of the two previous amounts |
enter a total of the two previous amounts |
enter a total of the two previous amounts |
enter a total of the two previous amounts |
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12/31/20 |
enter a dollar amount |
enter a dollar amount |
enter percentages |
% |
$enter a subtotal of the two previous amounts |
eTextbook and Media
List of Accounts
Part 2
Prepare the entry at December 31, 2020, to record compensation expense, if any, in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation |
Debit |
Credit |
---|---|---|
enter an account title |
enter a debit amount |
enter a credit amount |
enter an account title |
enter a debit amount |
enter a credit amount |
On December 31, 2016, Carla Company issues 170,000 stock-appreciation rights to its officers entitling them to...
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