Question

View Policies Current Attempt in Progress On December 31, 2016, Sarasota Company issues 128,000 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 $9. The fair value of the SARS is estimated to be $4 per SAR on December 31, 2017 $1 on December 31, 2018; $9 on December 31, 2019, and $7 on December 31, 2020. The service period is 4 years, and the exercise period is 7 years. 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 es-25,000 or (25,000 Date Fair Value Cumulative Compensation Recognizable Percentage Accrued Compensation Accrued to Date 12/31/17 $ 12/31/18 12/31/19 12/31/20 e Textbook and Media List of Accounts

Answer 1

	Fair value	Cummulative Compensation Recognizable (128,000 * Fair Value)	Percentage Accrued	Compensation Accrued to Date	Balance
12.31.2017	$                4	$                   512,000	25%	$               128,000	-
12.31.2018	$                1	$                   128,000	50%	$                 64,000	$                -64,000
12.31.2019	$                9	$                1,152,000	75%	$               864,000	$               800,000
12.31.2020	$                7	$                   896,000	100%	$               896,000	$                 32,000
	Account Title and Explanations			Debit	Credit
b.	Compensation Expense			$         32,000
	Stock-Appreciation Plan Account				$         32,000
c.	Stock-Appreciation Plan A/C			$       896,000
	Cash				$       896,000