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As a result of the share appreciation rights, what amount should be recognized as gain on reversal of share appreciation rights in Year 2? * O

As a result of the share appreciation rights, what amount should be recognized as gain on reversal of share appreciation rights in Year 2? * O

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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.On January 1, Year 1, Hotdog Inc. granted the president 50,000 share appreciation rights for past service. These rights are exercisable immediately and expire on December 31, Year 2. On exercise date, the president is entitled to receive cash for the excess of the share market price over the share market price on the grant date. The president did not exercise any of the rights during Year 1. The market price of the share was P100 on January 1, Year 1 and P115 on December 31, Year 1. The grantee exercised the rights on December 31, Year 2 when the market price was P110. As a result of the share appreciation rights, what amount should be recognized as gain on reversal of share appreciation rights in Year 2? * G 750,000 O 250,000 O 500,000
Transcribed Image Text:.On January 1, Year 1, Hotdog Inc. granted the president 50,000 share appreciation rights for past service. These rights are exercisable immediately and expire on December 31, Year 2. On exercise date, the president is entitled to receive cash for the excess of the share market price over the share market price on the grant date. The president did not exercise any of the rights during Year 1. The market price of the share was P100 on January 1, Year 1 and P115 on December 31, Year 1. The grantee exercised the rights on December 31, Year 2 when the market price was P110. As a result of the share appreciation rights, what amount should be recognized as gain on reversal of share appreciation rights in Year 2? * G 750,000 O 250,000 O 500,000
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