ercise 16-30

Capulet Company establishes a stock-appreciation rights program that entitles its new president Ben Davis to receive cash for the difference between the market price of the stock and a pre-established price of $30(also market price) on December 31, 2010, on30,000SARs. The date of grant is December 31, 2010, and the required employment (service) period is 4 years. President Davis exercises all of the SARs in 2016. The fair value of the SARs is estimated to be $6per SAR on December 31, 2011; $9on December 31, 2012; $15on December 31, 2013; $6on December 31, 2014; and $18on December 31, 2015.

(a)Prepare a 5-year (2011?2015) schedule of compensation expense pertaining to the30,000SARs granted to president Davis.(If the compensation decreases from prior year enter the amount as a negative number in the table e.g. -25,000 or (25,000).)