DRAX Company granted 30,000 share appreciation rights which entitled key employees to receive cash equal to the difference between ₱50 and the market price of the share on the date each right is exercised. The service period is 2020 through 2022, and the rights are exercisable in 2023. The market price of the share was ₱55 and ₱60 on December 2020 and 2021, respectively. What amount should be recorded as compensation expense for 2021? a. ₱ 200,000b. ₱ 150,000c. ₱ 50,000d. ₱ 350,000

Compensation expense recognized upto December 31, 2020 = (market price per share on December 31,…

Answered: DRAX Company granted 30,000 share…

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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DRAX Company granted 30,000 share appreciation rights which entitled key employees to receive cash equal to the difference between ₱50 and the market price of the share on the date each right is exercised. The service period is 2020 through 2022, and the rights are exercisable in 2023. The market price of the share was ₱55 and ₱60 on December 2020 and 2021, respectively. What amount should be recorded as compensation expense for 2021?

a. ₱ 200,000

b. ₱ 150,000

c. ₱ 50,000

d. ₱ 350,000

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