Management Decides to Allocate 1,000 Shares to a Particular Employee

question 38

Multiple Choice

Management decides to allocate 1,000 shares to a particular employee at a market value of $50.00 per share under a share appreciation rights plan.One year later,the value of these shares has increased to $65.00.How many shares would this employee actually receive as a bonus at the end of the year?

• A) 15.4 shares
• B) 20 shares
• C) 230.8 shares
• D) 1,000 shares

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Definitions:

Current Liabilities

Short-term financial obligations that are due within a year or within the operating cycle.

Average Inventory

The inventory average calculated by summing each inventory valuation (determined by physical inventory) and dividing by the number of physical inventories over a specified period of time; average annual inventory equals (beginning inventory value plus ending inventory value) divided by 2.

Ending Inventory

The total value or amount of goods available for sale at the end of an accounting period, calculated using inventory accounting methods.

Average Inventory

A financial measure used to estimate the value of inventory over a certain period, calculated by averaging the inventory levels at various points.