Good Boss Inc The Compensation Expense Would Be A)I
B)II
C)III
D)IV
E)none of the Answers Are Correct

question 30

Multiple Choice

Good Boss Inc.had the following pattern of results related to stock appreciation rights. $\begin{array}{lr}\text { Shares in the plan } & 20,000 \\\text { Option price } & \$ 15.00 \\\text { Market price- } &\\\text { end year } 1 & \$ 20.00 \\\text { end year } 2 & \$ 18.00 \\\text { end year } 3 & \$ 22.00\\\end{array}$ The compensation expense would be: $\begin{array}{lrrr}&\text { Year } 1 & \text { Year } 2 & \text { Year 3} \\\text { I. } & \$ 100,000 & \$-0- & \$ 40,000 \\\text { II. } & 100,000 & 60,000 & 40,000 \\\text { III. } & 100,000 & (40,000) & 80,000 \\\text { IV. } & 400,000 & -0- & 40,000\end{array}$

• A)I
• B)II
• C)III
• D)IV
• E)none of the answers are correct

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Definitions:

Stockholders' Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership interest of shareholders.

Inventory Turnover Ratio

A financial metric that shows how many times a company has sold and replaced its inventory over a certain period of time.

Average Sale Period

estimates the average time it takes for a company to sell its inventory.

Accounts Receivable Turnover

A financial metric that measures how often a company collects its receivables over a time period.