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On Jan.1.2019. A company Issued 10000 SARs to their CEO. Mr.Barker setting the base price at...

On Jan.1.2019. A company Issued 10000 SARs to their CEO. Mr.Barker setting the base price at $20 a share of service.

On 12/31/2019 the market price of stock was $23

On 12/31/2020 the market price of stock was $29

On 12/31/2021 the market price of stock was $32

What is the amount of the year and en entry that Mr. Baker records for the 2020 obligation for SAR Expense.

a. $10000 b.$50000 c.$90000 d. none

Business   Accounting   
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Answer #1

Stock appreciation rights (SARs) are a type of employee compensation linked to the company's stock price during a predetermined period. SARs are profitable for employees when the company's stock price rises, which makes them similar to employee stock options (ESOs). However, employees do not have to pay the exercise price with SARs. Instead, they receive the sum of the increase in stock or cash.

SAR value for the year 2020 = (29-23)*10000

= 60000.

But till date SAR value = (29-20)*10000= 90000.

This is the total SAR value for the year 2019&2020.

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