Parsons Limited established a share appreciation rights program that entitled its new president, Brandon Sutton, to receive cash for the difference between the shares' fair value and a pre-established price of $32 (also fair value on December 31, 2022), on 50,000 SARS. The date of grant is December 31, 2022, and the required employment (service) period is four years. The president exercised all of the SARS on December 31, 2027. The shares' fair value fluctuated as follows: December 31, 2023, $36; December 31, 2024, $39; December 31, 2025, $45: December 31, 2026, $36; and December 31, 2027. $48. The company recognizes the SARS in its financial statements. Assume that Parsons follows ASPE. (a) Prepare a five-year (2023 to 2027) schedule of compensation expense pertaining to the 50.000 SARs granted to Brandon. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) Schedule of Compensation Expense-Share Appreciation Rights (50,000) Cumulative Compensation Recognizable Date 12/31/23 12/31/24 12/31/25 Fair Value $36 39 45 Pre- established Price $32 32 32 4 $ Percentage Accrued % % Compensi Accrued Date
Parsons Limited established a share appreciation rights program that entitled its new president, Brandon Sutton, to receive cash for the difference between the shares' fair value and a pre-established price of $32 (also fair value on December 31, 2022), on 50,000 SARS. The date of grant is December 31, 2022, and the required employment (service) period is four years. The president exercised all of the SARS on December 31, 2027. The shares' fair value fluctuated as follows: December 31, 2023, $36; December 31, 2024, $39; December 31, 2025, $45: December 31, 2026, $36; and December 31, 2027. $48. The company recognizes the SARS in its financial statements. Assume that Parsons follows ASPE. (a) Prepare a five-year (2023 to 2027) schedule of compensation expense pertaining to the 50.000 SARs granted to Brandon. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) Schedule of Compensation Expense-Share Appreciation Rights (50,000) Cumulative Compensation Recognizable Date 12/31/23 12/31/24 12/31/25 Fair Value $36 39 45 Pre- established Price $32 32 32 4 $ Percentage Accrued % % Compensi Accrued Date
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Parsons Limited established a share appreciation rights program that entitled its new president, Brandon Sutton, to receive cash for
the difference between the shares' fair value and a pre-established price of $32 (also fair value on December 31, 2022), on 50,000
SARS. The date of grant is December 31, 2022, and the required employment (service) period is four years. The president exercised all
of the SARS on December 31, 2027. The shares' fair value fluctuated as follows: December 31, 2023, $36; December 31, 2024, $39;
December 31, 2025, $45: December 31, 2026. $36; and December 31, 2027. $48. The company recognizes the SARS in its financial
statements. Assume that Parsons follows ASPE.
(a)
Prepare a five-year (2023 to 2027) schedule of compensation expense pertaining to the 50.000 SARS granted to Brandon. (Enter
negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45))
Schedule of Compensation Expense - Share Appreciation Rights (50,000)
Cumulative
Compensation
Recognizable
Date
12/31/23
12/31/24
12/31/25
Fair
Value
$36
39
45
Pre-
established
Price
$32
32
32
$
4
11
Percentage
Accrued
%
%
$
Compens
Accrued
Date
Transcribed Image Text:Date
12/31/23
12/31/24
12/31/25
12/31/26
Fair
Value
$36
39
45
36
Schedule of Compensation Expense - Share Appreciation Rights (50,000)
Pre-
established
Price
$32
32
32
32
$
Cumulative
Compensation
Recognizable
Percentage
Accrued
11/0
D
%
%
%
Compensa
Accrued
Date
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