Xander Company issued 60,000 SARSentitling the holder to receive the differencebetween the market price at the time ofexercise and $25. The fair value of each SARon the date of grant was $7. The vestingperiod is 3 years. The SARS are exercised inthe 5tn year when the market price is $72.Which of the following is true?a. The liability at the time of exercise is 60,000 x(72 – 25).b. The company pays upon exercise 60,000 x25.C. The company receives at the time of exercise60,000 x 72.d. The liability at the end of the first year is60,000 х 7.

VESTING PERIOD : it is the term used when we talk about employees stock option program (ESOP). it is…

Xander Company issued 60,000 SARS entitling the holder to receive the difference between the market price at the time of exercise and $25. The fair value of each SAR on the date of grant was $7. The vesting period is 3 years. The SARS are exercised in the 5th year when the market price is $72. Which of the following is true? The liability at the time of exercise is 60,000 x (72 – 25). -. The company pays upon exercise 60,000 x 25. The company receives at the time of exercise 60,000 x 72. |. The liability at the end of the first year is 60,000 х 7.

Xander Company issued 60,000 SARS entitling the holder to receive the difference between the market price at the time of exercise and $25. The fair value of each SAR on the date of grant was $7. The vesting period is 3 years. The SARS are exercised in the 5th year when the market price is $72. Which of the following is true? The liability at the time of exercise is 60,000 x (72 – 25). -. The company pays upon exercise 60,000 x 25. The company receives at the time of exercise 60,000 x 72. |. The liability at the end of the first year is 60,000 х 7.

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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Question

Xander Company issued 60,000 SARS
entitling the holder to receive the difference
between the market price at the time of
exercise and $25. The fair value of each SAR
on the date of grant was $7. The vesting
period is 3 years. The SARS are exercised in
the 5tn year when the market price is $72.
Which of the following is true?
a. The liability at the time of exercise is 60,000 x
(72 – 25).
b. The company pays upon exercise 60,000 x
25.
C. The company receives at the time of exercise
60,000 x 72.
d. The liability at the end of the first year is
60,000 х 7.

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