Question: Hi can you help me solve this problem? It is all about share appreciation rights and it needs journal entries... Thank you B. Pau Company
Hi can you help me solve this problem? It is all about share appreciation rights and it needs journal entries... Thank you
B. Pau Company issued share appreciation rights to its Chief executive Officer on January 1, 2018. The share appreciation rights may be exercised beginning January 1,2021 provided that the officer is still in the employ of the company at the date of exercise. Each right provides for a cash payment equal to the amount the share price of Pau Company exceeds P50. The equivalent number of shares for share appreciation rights will be based on the level of sales of the company during the year 2020, as follows:
Level of SalesEquivalent Shares Granted
P250 million - P400 million10,000
Above P400 million - P750 million15,000
Above P750 million20,000
The level of sales actually achievedby the enterprise and the share price at the end of each year are:
YearLevel of SalesShare price, end of year
2018P350 millionP74
2019P410 millionP85
2020P760 millionP95
Required:
Entries to record transactions at the end of each year (2018, 2019, 2020 and 2021).
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