Use the following information for questions.
On January 1, 2016, Luanda Ltd.established a stock appreciation rights plan for its executives.This plan entitles them to receive cash at any time during the next four years for the difference between the market price of its common shares and a pre-established price of $20, on 50,000 SARs.Market prices of the shares are as follows: Compensation expense relating to the plan is to be recorded over a four-year period beginning January 1, 2016.
-What amount of compensation expense should Luanda recognize for calendar 2017?
A)$0
B)$ 25,000
C)$125,000
D)$250,000

Question

Use the following information for questions.
On January 1, 2016, Luanda Ltd.established a stock appreciation rights plan for its executives.This plan entitles them to receive cash at any time during the next four years for the difference between the market price of its common shares and a pre-established price of $20, on 50,000 SARs.Market prices of the shares are as follows:  Compensation expense relating to the plan is to be recorded over a four-year period beginning January 1, 2016.
-What amount of compensation expense should Luanda recognize for calendar 2017?
A)$0 
B)$ 25,000 
C)$125,000 
D)$250,000

Quizplus · Accepted Answer

The compensation expense for 2017 is $25,000, which is the amount of salary expense incurred during the year.

Use the Following Information for Questions