QUESTION THREE

(a) JK granted 1,000 share appreciation rights (SARS) to its 120 employees on 1 December 2007. To be eligible, employees must remain employed for 3 years from the grant date. The rights must be exercised in December 2010. In the year to 30 November 2008, 12 staff left and a further 15 were expected to leave over the following two years. In the year to 30 November 2009 8 staff left and a further 10 were expected to leave in the following year. The fair value of each SAR was $15 at 30 November 2008 and $17 at 30 November 2009

Required:

Prepare accounting entries to account for the above transactions.

QUESTION THREE (a)JK granted 1,000 share appreciation rights (SARs) to its 120 employees on 1 December 2007. To be eligible, employees must remain employed for 3 years from the grant date. The rights must be exercised in December 2010. In the year to 30 November 2008, 12 staff left and a further 15 were expected to leave over the following two years. In the year to 30 November 2009 8 staff left and a further 10 were expected to leave in the following year. The fair value of each SAR was $15 at 30 November 2008 and $17 at 30 November 2009 Required: (5 marks) Prepare accounting entries to account for the above transactions. (4 marks)