Drake Company has granted 200 share appreciation rights to each of its 300 employees on January 1, 2016. The rights are due to vest on December 31, 2017, with payment being made on December 31, 2018. During the year 2016, the company estimated that all options would vest, although only 90% of the options actually vested. Share prices are as follows: January 1, 2016. P20 December 31, 2016. 24 December 31, 2017. 27 December 31, 2018. 30 1. What liability will be recorded on December 31, 2016 as a result of the share appreciation rights? 2. How much compensation expense should be recorded for the year ended December 31, 2017?

Drake Company has granted 200 share appreciation rights to each of its 300 employees on January 1, 2016. The rights are due to vest on December 31, 2017, with payment being made on December 31, 2018. During the year 2016, the company estimated that all options would vest, although only 90% of the options actually vested. Share prices are as follows: January 1, 2016. P20 December 31, 2016. 24 December 31, 2017. 27 December 31, 2018. 30 1. What liability will be recorded on December 31, 2016 as a result of the share appreciation rights? 2. How much compensation expense should be recorded for the year ended December 31, 2017?

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

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