What amount should be recognized as gain on reversal of share appreciation rights in 2021? *see attached a. 1,600,000 b. 1,200,000 c. 400,000 d. 0

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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What amount should be recognized as gain on reversal of share appreciation rights in 2021?
*see attached


a. 1,600,000
b. 1,200,000
c. 400,000
d. 0

On Jan. 1, 2020, Rukawa Company granted the chief executive officer
(CEO) 80,000 share appreciation rights for past services. The rights are
exercisable immediately and expire on Dec. 31, 2021.
On exercise, the CEO is entitled to receive cash for the excess of the
share market price on exercise date over the market price on grant
date.
The CEO did not exercise any of the rights in 2020. The CEO exercised
the rights on Dec. 31, 2021 when the market price was Php115.
The market price of the share was Php100 on Jan. 1, 2020 and Php120
on Dec. 31, 2020.
Transcribed Image Text:On Jan. 1, 2020, Rukawa Company granted the chief executive officer (CEO) 80,000 share appreciation rights for past services. The rights are exercisable immediately and expire on Dec. 31, 2021. On exercise, the CEO is entitled to receive cash for the excess of the share market price on exercise date over the market price on grant date. The CEO did not exercise any of the rights in 2020. The CEO exercised the rights on Dec. 31, 2021 when the market price was Php115. The market price of the share was Php100 on Jan. 1, 2020 and Php120 on Dec. 31, 2020.
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