Problem 25-19 (PHILCPA Adapted) On January 1, 2021, Mermaid Company issued share appreciation rights to its president exercisable for one year beginning January 1, 202 , 2024 provided that the president is still in the employ of the entity at that date of exercise. Each right provided for a cash payment equal to the excess of the entity's share price over P50. The equivalent number of shares for share appreciation rights shall be based on the level of sales at the date of exercise. Level of sales Equivalent shares P2,000,000 - P4,000,000 10,000 shares Over P4,000,000 - P6,000,000 15,000 shares Over P6,000,000 20,000 shares The actual sales totaled P3,300,000 in 2021, P5,200,000 in 2022 and P6,500,000 in 2023. The share prices are P86 in 2021, P95 in 2022 and P105 in 2023. 1. What amount should be reported as compensation expense for 2021? a. 360,000 b . 120,000 C. 180,000 d. 160,000 2. What amount should be reported as compensation expense for 2022? a. 675,000 b. 330,000 250,000 d. 450,000 3. What amount should be reported as compensation expense for 2023? a. 850,000 b. 770,000 C . 650,000 d. 425,000 914