Use the following information for questions 75 through 77.
On January 1, 2014, Korsak, Inc. established a stock appreciation rights plan for its executives. It entitled them to receive cash at any time during the next four years for the difference between the market price of its common stock and a pre-established price of $20 on 100,000 SARs. Current market prices of the stock are as follows: Compensation expense relating to the plan is to be recorded over a four-year period beginning January 1, 2014.
-What amount of compensation expense should Korsak recognize for the year ended December 31, 2015?

Question

Use the following information for questions 75 through 77.
On January 1, 2014, Korsak, Inc. established a stock appreciation rights plan for its executives. It entitled them to receive cash at any time during the next four years for the difference between the market price of its common stock and a pre-established price of $20 on 100,000 SARs. Current market prices of the stock are as follows:  Compensation expense relating to the plan is to be recorded over a four-year period beginning January 1, 2014.
-What amount of compensation expense should Korsak recognize for the year ended December 31, 2015?

Quizplus · Accepted Answer

Korsak should recognize $50,000 of compensation expense for the year ended December 31, 2015, because the services were performed in 2015 and the payment is not contingent on future services.

Use the Following Information for Questions 75 Through 77