In order to boost the sales of ABC & Co., the board of directors approved a share appreciation plan for its Chief Operating Officer. The plan was granted on January 1, 2020 and is exercisable for one year beginning January 1, 2022, provided that the CO0 is still employed at the date of its exercise. The plan compensates the COO for a cash payment equal to the excess of XYZ's share price over the pre-determined price of P50. Equivalent shares to be granted will be dependent upon the level of annual sales of the company on the date of exercise, as follows: • 100 million to 200 million sales: 10,000 shares • Over 200 million sales: 12,000 shares Actual sales achieved by XYZ, and the share price of the company's shares at the end of each year are below: Year Sales Share Price 2020 120 million P77 2021 250 million P75

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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How much should the company recognized as compensation expense for 2021?

 

To input answers, kindly follow the sample format below(no peso sign, with comma, no space):

ex.100,000

 

If answer is not exact, input your answer up to two decimal places:

 

ex. 100,235.5678 ---> 100,235.57

 

In order to boost the sales of ABC & Co., the board of directors approved a share appreciation
plan for its Chief Operating Officer. The plan was granted on January 1, 2020 and is exercisable
for one year beginning January 1, 2022, provided that the CO0 is still employed at the date of
its exercise. The plan compensates the coO for a cash payment equal to the excess of XYZ's
share price over the pre-determined price of P50. Equivalent shares to be granted will be
dependent upon the level of annual sales of the company on the date of exercise, as follows:
• 100 million to 200 million sales: 10,000 shares
• Over 200 million sales: 12,000 shares
Actual sales achieved by XYZ, and the share price of the company's shares at the end of each
year are below:
Year
Sales
Share Price
2020
120 million
P77
2021
250 million
P75
Transcribed Image Text:In order to boost the sales of ABC & Co., the board of directors approved a share appreciation plan for its Chief Operating Officer. The plan was granted on January 1, 2020 and is exercisable for one year beginning January 1, 2022, provided that the CO0 is still employed at the date of its exercise. The plan compensates the coO for a cash payment equal to the excess of XYZ's share price over the pre-determined price of P50. Equivalent shares to be granted will be dependent upon the level of annual sales of the company on the date of exercise, as follows: • 100 million to 200 million sales: 10,000 shares • Over 200 million sales: 12,000 shares Actual sales achieved by XYZ, and the share price of the company's shares at the end of each year are below: Year Sales Share Price 2020 120 million P77 2021 250 million P75
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