Use the Following Information for Questions

question 66

Multiple Choice

Use the following information for questions.
On January 1, 2016, Luanda Ltd.established a stock appreciation rights plan for its executives.This plan entitles them to receive cash at any time during the next four years for the difference between the market price of its common shares and a pre-established price of $20, on 50,000 SARs.Market prices of the shares are as follows: Compensation expense relating to the plan is to be recorded over a four-year period beginning January 1, 2016.
-What amount of compensation expense should Luanda recognize for calendar 2016?

• A)$150,000
• B)$187,500
• C)$225,000
• D)$900,000

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Definitions:

Natural Gas

A fossil fuel consisting mainly of methane, used as an energy source for heating, electricity generation, and as fuel for vehicles.

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A metric that quantifies the amount of nature's resources an individual, community or activity consumes relative to the Earth's capacity to regenerate those resources.

Canada

A country in North America known for its vast landscapes, multicultural diversity, and as the second-largest country in the world by area.