On December 31, 2021, Skysong Company issues 139,000 stock-appreciation rights to its officers entitling them to receive cash forthe difference between the market price of its stock and a pre-established price of $11. The fair value of the SARS is estimated to be$5 per SAR on December 31, 2022; $2 on December 31, 2023; $11 on December 31, 2024; and $9 on December 31, 2025. Theservice period is 4 years, and the exercise period is 7 years.(a)Prepare a schedule that shows the amount of compensation expense allocable to each year affected by the stock-appreciationrights plan. (If the compensation decreases from prior year enter the amount as a negative number in the table e.g. -25,000 or (25,000).)Date12/31/2212/31/2312/31/24$Fair Value11Cumulative Compensation Recognizable$11PercentageAccrued% S%%

Given:Service period: 4 yearsExercise period: 7 yearsFirst, let's calculate the total compensation…

Answered: Skysong Company issues 139,000…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Skysong Company issues 139,000 stock-appreciation rights to its offi ween the market price of its stock and a pre-established price of $11. The fai cember 31, 2022; $2 on December 31, 2023; $11 on December 31, 2024; an years and the exercic