On January 1, 2020, DEF Co. granted its president 50,000 share appreciation rights. The rights are exercisable immediately and expire on December 31, 2021. On exercise, the president is entitled to receive cash for the excess of the share market price on exercise date over the market price on grant date. The president did not exercise any of the rights in 2020. The market price of the share was P100 on January 1, 2020 and P115 on December 31, 2021. The president exercised the rights on December 31, 2021 when the market price was P110. As a result of the share appreciation rights, FAITH Co. shall recognize gain on reversal of share appreciation rights in 2021 at?
On January 1, 2020, DEF Co. granted its president 50,000 share appreciation rights. The rights are exercisable immediately and expire on December 31, 2021. On exercise, the president is entitled to receive cash for the excess of the share market price on exercise date over the market price on grant date. The president did not exercise any of the rights in 2020. The market price of the share was P100 on January 1, 2020 and P115 on December 31, 2021. The president exercised the rights on December 31, 2021 when the market price was P110. As a result of the share appreciation rights, FAITH Co. shall recognize gain on reversal of share appreciation rights in 2021 at?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter17: Business Tax Credits And The Alternative Minimum Tax
Section: Chapter Questions
Problem 5CE
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Transcribed Image Text:On January 1, 2020, DEF Co. granted its president 50,000 share
appreciation rights. The rights are exercisable immediately and expire on
December 31, 2021. On exercise, the president is entitled to receive cash
for the excess of the share market price on exercise date over the market
price on grant date. The president did not exercise any of the rights in
2020. The market price of the share was P100 on January 1, 2020 and P115
on December 31, 2021. The president exercised the rights on December 31,
2021 when the market price was P110. As a result of the share appreciation
rights, FAITH Co. shall recognize gain on reversal of share appreciation
rights in 2021 at?
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