BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
1 views

On January 1, 2019, Salt Lake Corporation grants share appreciation rights to its CEO. Under the plan, the CEO will receive cash for the difference between the quoted market price over a $50 option price for 1,000 shares of the company’s common stock on the exercise date. The service period is 3 years. The fair value per SAR is $15 at the end of 2019 and $27 at the end of 2020. Determine the compensation expense for 2020.

To determine

Compute the compensation expense for the year 2020.

Explanation

Compensation expense: It is an expense paid by the company to its employees for their services. This may be in the kind of cash or stock options.

Compute the compensation expense for the year 2020:

Compensation expensefor the year 2020} = {(Fair value at the end of Year 2020× Number of SARs granted × Number of years completed in vesting periodVesting period)Compensation expense in Year 2019}($27×1,000 SARs×2 years3 years)$5,000(1)=$18,000$5,000=$13,000

Therefore, Compensation expense for the year 2020 is $13,000

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What is systems selection?

Accounting Information Systems

How would each of the following scenarios affect a firms cost of debt, rd( 1 T); its cost of equity, rs; and i...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Contrast a win-win negotiator with a win-lose negotiator.

Purchasing and Supply Chain Management