Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

*E16-29. On December 31, 2010, Beckford Company issues 150,000 stock-appreciation rights to its officers entitling them to receive cash for the difference between the market

*E16-29.

On December 31, 2010, Beckford Company issues 150,000 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 $4 per SAR on December 31, 2011; $1 on December 31, 2012; $10 on December 31, 2013; and $9 on December 31, 2014. The service period is 4 years, and the exercise period is 7 years.

Instructions

(a)

Prepare a schedule that shows the amount of compensation expense allocable to each year affected by the stock-appreciation rights plan.

(b)

Prepare the entry at December 31, 2014, to record compensation expense, if any, in 2014.

(c)

Prepare the entry on December 31, 2014, assuming that all 150,000 SARs are exercised.

8

On December 31, 2010, Beckford Company issues 150,000 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 $4 per SAR on December 31, 2011; $1 on December 31, 2012; $10 on December 31, 2013; and $9 on December 31, 2014. The service period is 4 years, and the exercise period is 7 years.

Instructions

(a)

Prepare a schedule that shows the amount of compensation expense allocable to each year affected by the stock-appreciation rights plan.

(b)

Prepare the entry at December 31, 2014, to record compensation expense, if any, in 2014.

(c)

Prepare the entry on December 31, 2014, assuming that all 150,000 SARs are exercised.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Advanced Accounting

Authors: Joe Hoyle

4th Edition

78136636, 978-0078136634

More Books

Students also viewed these Accounting questions

Question

How to analyze the statement of cash flows. AppendixLO1

Answered: 1 week ago

Question

What are some of the benefits of being a critical thinker? (p. 231)

Answered: 1 week ago