Question
On January 1, 2020, Bonita Industries established a stock appreciation rights plan for its executives. It entitled them to receive cash at any time during
On January 1, 2020, Bonita Industries established a stock appreciation rights plan for its executives. It entitled them to receive cash at any time during the next four years for the difference between the market price of its common stock and a pre-established price of $20 on 115000 SARs. Current market prices of the stock are as follows:
January 1, 2020 | $36 per share | |
December 31, 2020 | 39 per share | |
December 31, 2021 | 31 per share | |
December 31, 2022 | 34 per share |
Compensation expense relating to the plan is to be recorded over a four-year period beginning January 1, 2020. What amount of compensation expense should Bonita recognize for the year ended December 31, 2020?
a. $2185000
b. $ 546250
c. $ 435000
d. $ 345000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started