In order to boost the sales of Leila & 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 COO is still employed at the date of its exercise. The plan compensates the COO for a cash payment equal to the excess of Leila’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 Leila, and the share price of the company’s shares at the end of each year are below (SEE PICTURE BELOW): How much should the company recognized as compensation expense for 2020 and 2021, respectively? a. 135,000 ; 165,000 b. 270,000 ; 30,000 c. 385,000 ; 515,000 d. 770,000 ; 900,000
In order to boost the sales of Leila & 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 COO is still employed at the date of its exercise. The plan compensates the COO for a cash payment equal to the excess of Leila’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 Leila, and the share price of the company’s shares at the end of each year are below (SEE PICTURE BELOW): How much should the company recognized as compensation expense for 2020 and 2021, respectively? a. 135,000 ; 165,000 b. 270,000 ; 30,000 c. 385,000 ; 515,000 d. 770,000 ; 900,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
In order to boost the sales of Leila & 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 COO is still employed at the date of its exercise. The plan compensates the COO for a cash payment equal to the excess of Leila’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 Leila, and the share price of the company’s shares at the end of each year are below (SEE PICTURE BELOW):
How much should the company recognized as compensation expense for 2020 and 2021, respectively?
· 100 million to 200 million sales: 10,000 shares
· Over 200 million sales: 12,000 shares
Actual sales achieved by Leila, and the share price of the company’s shares at the end of each year are below (SEE PICTURE BELOW):
How much should the company recognized as compensation expense for 2020 and 2021, respectively?
a. 135,000 ; 165,000
b. 270,000 ; 30,000
c. 385,000 ; 515,000
d. 770,000 ; 900,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education