Sal Issued Tor its exe Would vest ailer date). The SARS were recorded as a liability because the executives could choose to receive cash at exercise. The fair value of th was estimated to be $5 per SAR on 1/1/2016 and $6, $9, and $6 per SAR at the end of 2016, 2017, and 2018, respectively. Required: 1. What compensation expense shall be recorded for 2016? 2. What compensation expense shall be recorded for 2017? 3. What compensation expense shall be recorded for 2018? 4. What is the ending balance in the liability-SAR account on 12/31/2018?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On 1/1/2016, Universal issued 10,000 cash settled SARS for its key executives that would vest after three years on 1/1/2019 (the vesting
date). The SARS were recorded as a liability because the executives could choose to receive cash at exercise. The fair value of the SARS
was estimated to be $5 per SAR on 1/1/2016 and $6, $9, and $6 per SAR at the end of 2016, 2017, and 2018, respectively.
Required:
1. What compensation expense shall be recorded for 2016?
2. What compensation expense shall be recorded for 2017?
3. What compensation expense shall be recorded for 2018?
4. What is the ending balance in the liability-SAR account on 12/31/2018?
Transcribed Image Text:On 1/1/2016, Universal issued 10,000 cash settled SARS for its key executives that would vest after three years on 1/1/2019 (the vesting date). The SARS were recorded as a liability because the executives could choose to receive cash at exercise. The fair value of the SARS was estimated to be $5 per SAR on 1/1/2016 and $6, $9, and $6 per SAR at the end of 2016, 2017, and 2018, respectively. Required: 1. What compensation expense shall be recorded for 2016? 2. What compensation expense shall be recorded for 2017? 3. What compensation expense shall be recorded for 2018? 4. What is the ending balance in the liability-SAR account on 12/31/2018?
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