Togo Incorporation started a share appreciation plan on January 1, 2022, when it granted 50,000 rights to its executives. The vesting period is2 years. The stock appreciation rights are settled for cash. The plan expires on January 1, 2024. The fair value of Togo's SARS for the yearsended December 31, 2022, and 2023, are as follows:(Click the icon to view the additional information.)All rights are exercised on January 1, 2024, when their fair value is $7 and the market price of the stock is $35 per share. What is thecompensation expense in 2022 and in 2023? Prepare the journal entries to record the SAR plan.Determine the compensation expense in 2022.Compensation expense in 2022 =Determine the compensation expense in 2023.Compensation expense in 2023 =Now, prepare the journal entry to record the compensation expense for the year 2022. (Record debits first, then credits. Exclude explanationsfrom any journal entries.)AccountNext, prepare the journal entry to record the compensation expense for the year 2023.AccountAccountDecember 31, 2022Finally, prepare the journal entry to record the rights exercised on January 1, 2024.January 1, 2024DateDecember 31, 2023Additional InformationDecember 31, 2022December 31, 2023$Fair Value67X

Lets understand the basics. Share appeciation right is given to employees to encourage the efforts…

Togo Incorporation started a share appreciation plan on January 1, 2022, when it granted 50,000 rights to its executives. The vesting period is 2 years. The stock appreciation rights are settled for cash. The plan expires on January 1, 2024. The fair value of Togo's SARS for the years ended December 31, 2022, and 2023, are as follows: (Click the icon to view the additional information.) All rights are exercised on January 1, 2024, when their fair value is $7 and the market price of the stock is $35 per share. What is the compensation expense in 2022 and in 2023? Prepare the journal entries to record the SAR plan.

Togo Incorporation started a share appreciation plan on January 1, 2022, when it granted 50,000 rights to its executives. The vesting period is 2 years. The stock appreciation rights are settled for cash. The plan expires on January 1, 2024. The fair value of Togo's SARS for the years ended December 31, 2022, and 2023, are as follows: (Click the icon to view the additional information.) All rights are exercised on January 1, 2024, when their fair value is $7 and the market price of the stock is $35 per share. What is the compensation expense in 2022 and in 2023? Prepare the journal entries to record the SAR plan.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Employee Benefits

In an organization employees are the most important resource and most important asset. They can lead an organization to the sky or can be the reason for unsuccessful of business. Therefore, it is very much important that employees of an organization should be satisfied by the environment of the organization and most importantly with the salary, wages incentives, etc.

Question

Togo Incorporation started a share appreciation plan on January 1, 2022, when it granted 50,000 rights to its executives. The vesting period is
2 years. The stock appreciation rights are settled for cash. The plan expires on January 1, 2024. The fair value of Togo's SARS for the years
ended December 31, 2022, and 2023, are as follows:
(Click the icon to view the additional information.)
All rights are exercised on January 1, 2024, when their fair value is $7 and the market price of the stock is $35 per share. What is the
compensation expense in 2022 and in 2023? Prepare the journal entries to record the SAR plan.
Determine the compensation expense in 2022.
Compensation expense in 2022 =
Determine the compensation expense in 2023.
Compensation expense in 2023 =
Now, prepare the journal entry to record the compensation expense for the year 2022. (Record debits first, then credits. Exclude explanations
from any journal entries.)
Account
Next, prepare the journal entry to record the compensation expense for the year 2023.
Account
Account
December 31, 2022
Finally, prepare the journal entry to record the rights exercised on January 1, 2024.
January 1, 2024
Date
December 31, 2023
Additional Information
December 31, 2022
December 31, 2023
$
Fair Value
6
7
X

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