Use the Following Information for Questions 75 Through 77

question 1

Multiple Choice

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.
-On December 31, 2016, 25,000 SARs are exercised by executives. What amount of compensation expense should Korsak recognize for the year ended December 31, 2016?

• A) $475,000
• B) $325,000
• C) $975,000
• D) $130,000

---

Definitions:

State Court

Courts that have jurisdiction over disputes involving state laws and constitutions.

Federal Jurisdiction

The legal authority granted to federal courts and agencies to hear and decide cases that involve the U.S. Constitution, federal laws, disputes between states, or parties from different states.

Court of Appeals for the Federal Circuit

A specific United States appellate court with jurisdiction over several areas, including international trade, government contracts, patents, and trademarks.

United States Court of Federal Claims

A federal court that hears monetary claims against the U.S. government.