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tensa zangetsu [6.8K]
3 years ago
6

On January 1, 2017, Sheridan Company established a stock appreciation rights plan for its executives. It entitled them to receiv

e 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 114000 SARs. Current market prices of the stock are as follows:
January 1, 2017
$35 per share

December 31, 2017
38 per share

December 31, 2018
30 per share

December 31, 2019
33 per share


Compensation expense relating to the plan is to be recorded over a four-year period beginning January 1, 2017.

What amount of compensation expense should Sheridan recognize for the year ended December 31, 2018?
Business
1 answer:
Elza [17]3 years ago
7 0

Answer:

$1,140,000

Explanation:

AS AT December 2018, the market price ended at 30 USD Which is 10 USD above pre established price on the 114,000 SARs

thus compensation for the year ended 2018 will be 10 x 114,000

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