Prepare the entry at december

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Question - On December 31, 2010, Beckford Company issues 150,000 stock-appreciation rights to its officers entitling them to receive cash for the difference between the market price of its stock and a pre-established price of $10. The fair value of the SARs is estimated to be $4 per SAR on December 31, 2011; $1 on December 31, 2012; $10 on December 31, 2013; and $9 on December 31, 2014. The service period is 4 years, and the exercise period is 7 years.

Instructions

(a) Prepare a schedule that shows the amount of compensation expense allocable to each year affected by the stock-appreciation rights plan.

(b) Prepare the entry at December 31, 2014, to record compensation expense, if any, in 2014.

(c) Prepare the entry on December 31, 2014, assuming that all 150,000 SARs are exercised.

Reference no: EM132071574

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