Question

Exercise 16-29 (Part Level Submission) On December 31, 2016, Carla Company issues 192,000 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 $10. The fair value of the SARs is estimated to be $5 per SAR on December 31, 2017; $2 on December 31, 2018; $10 on December 31, 2019; and $8 on December 31, 2020. The service period is 4 years, and the exercise period is 7 years.

(a) 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 Accrued Compensation Accrued to Date Expense 2017 Expense 2018 Expense 2019 Expense 2020 12/31/17 $enter a dollar amountenter a dollar amount $enter a dollar amountenter a dollar amount enter percentagesenter percentages % $enter a dollar amountenter a dollar amount $enter a dollar amountenter a dollar amount $enter a dollar amountenter a dollar amount $enter a dollar amountenter a dollar amount $enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount 12/31/18 enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter percentagesenter percentages % enter a subtotal of the two previous amountsenter a subtotal of the two previous amounts enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount 12/31/19 enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter percentagesenter percentages % enter a subtotal of the two previous amountsenter a subtotal of the two previous amounts enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter a total of the two previous amountsenter a total of the two previous amounts enter a total of the two previous amountsenter a total of the two previous amounts enter a total of the two previous amountsenter a total of the two previous amounts enter a total of the two previous amountsenter a total of the two previous amounts enter a total of the two previous amountsenter a total of the two previous amounts 12/31/20 enter a dollar amountenter a dollar amount enter a dollar amountenter a dollar amount enter percentagesenter percentages % $enter a subtotal of the two previous amountsenter a subtotal of the two previous amounts

Answer 1

H 10 B DE F G Service Exercise SAR Price period period 2 12/31/2016 1 1,92,000 5 Cumulative compensation 3 Date Fair value recognizable % accured Total Balance expense 4. 12/31/2017 9600001 25% 240000/- 2017 5 12/31/2018 384000 50% 192000 -48,000 2018 Year 6 12/31/2019 1920000| 75% 1440000 1248000| 2019 7 12/31/2020 15360001 100% 1536000 960001 2020

А в I F G SAR 192000 2 12/31/2016 D E Service Exercise Price period period 10 Cumulative compensation recognizable % accured Total =$B$2*B4 0.25 =C4*D4 =$B$2*B5 0.5 =C5*D5 Balance 3 Date 4. 12/31/2017 5 12/31/2018 Fair value 5 2 Year expense 2017 2018 =E5-E4 6 12/31/2019 10 =$B$2*B6 0.75 =C6*D6 =E6-E5 2019 7 12/31/2020 18 =$B$2*B7 =C7*D7 =E7-E6 2020