The Davis Corporation granted a share appreciation right plan to its employees on December 31, 20x0. A total of 300,000 share appreciation rights were granted. The vesting period ends on December 30, 20x2. The exercise period starts December 31, 20x2 and ends December 31, 20x4. Data on the fair values of the SAR's, the average cash out amount, the number of SAR's exercised, and management's estimate of the % of SAR's that will vest is as follows: Date Fair Value of Average cash each SAR at out for exercised year-end SARS during the year Amount of Estimate of % of SARS SARs that will vest exercised $7 75% December 31, 20x1 11 December 31, 20x2 $8 85,000 72% (actual) 9 9 10 57,000 December 31, 20x3 - 12 December 31, 20x4 74,000 Required - a. What is the compensation expense for the year ended December 31, 20x2? b. What is the compensation expense for the year ended December 31, 20x4? 9 The Davis Corporation granted a share appreciation right plan to its employees on December 31, 20x0. A total of 300,000 share appreciation rights were granted. The vesting period ends on December 30, 20x2. The exercise period starts December 31, 20x2 and ends December 31, 20x4. Data on the fair values of the SAR's, the average cash out amount, the number of SAR's exercised, and management's estimate of the % of SAR's that will vest is as follows: Date Fair Value of Average cash each SAR at out for exercised year-end SARS during the year Amount of Estimate of % of SARS SARs that will vest exercised $7 75% December 31, 20x1 11 December 31, 20x2 $8 85,000 72% (actual) 9 9 10 57,000 December 31, 20x3 - 12 December 31, 20x4 74,000 Required - a. What is the compensation expense for the year ended December 31, 20x2? b. What is the compensation expense for the year ended December 31, 20x4? 9