Use the following information to answer the TWO questions that follow:

On January 1, 2022, ABC, Inc. initiated three compensation plans for its employees, all with a 4-year service period:

Granted 25,000 Stock Appreciation Rights (SARs) to the president subject to forfeiture if he leaves or is fired from the company before December 31, 2025. The president will receive shares upon exercise of the SARs.

The fair value of the SARs on 1/1/22 was $5.5 and on 12/31/22 it was $9.

Awarded 50,000 restricted common stock units (RSUs) to other executives subject to forfeiture if they leave or are terminated from the company before December 31, 2025. These executives will receive cash in lieu of shares upon exercise of the RSUs. ).

Awarded 100,000 Restricted Stock Awards to remaining employees subject to forfeiture if they leave or are terminated from the company before December 31, 2025.

The market value of ABC common stock was $5 on 1/1/22 and $7 on 12/31/22. ABC common stock has a par value of $1.

15. How much is the total compensation expense related to these three plans that will be reported on the 2022 income and expense statement?

a. $246,875

b. $221,875

c. $268,750

d. $218,750

16. How much is the total debt related to these three plans that will be reported in the 2022 statement of financial position?

a. $87,500

b. $121,875

c. $0

d. $296,875