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The image you've uploaded presents a problem involving share appreciation rights (SARs) in a corporate scenario. The text describes a company, Stewards Ltd., granting 10,000 SARs, vesting over a two-year period. The SARs have an exercise price of $20, and employees can exercise them after the vesting period. Some SARs were forfeited, and others were exercised, with detailed cash compensation provided based on market prices on different dates.

### The market prices of shares for Stewards Ltd.:
- **January 1, Year 1**: $20
- **December 31, Year 1**: $21
- **September 30, Year 2**: $24
- **December 31, Year 2**: $23
- **June 15, Year 3**: $25
- **December 31, Year 3**: $24
- **December 31, Year 4**: $20

### The following claims are evaluated:
1. **The cash paid for the exercise of SARs on September 30, Year 2, was $12,000.**
2. **There will be a SAR asset of $10,000 reported on December 31, Year 2.**
3. **The cash paid for the exercise of SARs on June 15, Year 3, was $7,500.**
4. **Compensation expense will be debited by $1,600 on December 31, Year 4.**

Let's analyze each statement based on the provided data.

1. **Cash paid on September 30, Year 2**: On this date, the market price is $24, and some employees forfeited 1,200 SARs. It is necessary to calculate the cash for exercised SARs based on the remaining shares and the price difference.
2. **SAR asset on December 31, Year 2**: Market price on this date is $23, and the asset depends on the unexercised shares.
3. **Cash paid for exercise on June 15, Year 3**: On this date, 7,500 SARs were exercised at a market price of $25. The cash paid equals the difference between the exercise price and the market price.
4. **Compensation expense on December 31, Year 4**: The market price on this date is $20, and the remaining 4,000 SARs are exercised. We need to evaluate the compensation expense for this transaction.

I'll now calculate the details for each of these points to verify the correctness of the statements.It seems there was a timeout error while calculating. Let's approach this step by step without using complex operations in one go:

### 1. **Cash Paid for SARs on September 30, Year 2**:
   - **Market price**: $24
   - **Exercise price**: $20
   - **Number of SARs remaining**: $ 10,000 - 1,200 = 8,800 $
   - **Cash Paid**: 
     \[
     8,800 \times (24 - 20) = 8,800 \times 4 = 35,200
     \]

### 2. **Cash Paid for SARs on June 15, Year 3**:
   - **Number of SARs exercised**: 7,500
   - **Market price**: $25
   - **Exercise price**: $20
   - **Cash Paid**: 
     \[
     7,500 \times (25 - 20) = 7,500 \times 5 = 37,500
     \]

### 3. **Compensation Expense on December 31, Year 4**:
   - **Number of remaining SARs**: $ 10,000 - 1,200 - 7,500 = 1,300 $
   - **Market price**: $20
   - **Exercise price**: $20
   - Since the market price equals the exercise price, the compensation expense will be zero.

### Summary of Calculations:
- **Cash paid on September 30, Year 2**: $35,200
- **Cash paid on June 15, Year 3**: $37,500
- **Compensation expense on December 31, Year 4**: $0

These calculations should help verify or invalidate the given statements. Let me know if you'd like more detailed explanations or further assistance. 

### Questions for Further Learning:
1. How do forfeited SARs affect compensation expense in future years?
2. How is the total compensation expense spread over the vesting period?
3. What happens if the market price is lower than the exercise price?
4. How are SARs different from stock options in terms of employee compensation?
5. What would the tax implications be for the cash paid on SARs?

### Tip:
SARs allow employees to benefit from share price increases without having to buy shares, which can reduce risk compared to stock options.

On January 1, Year 1, Stewards Ltd., a company that reports under ASCIF, granted 10,000 cash-settled SARs, vesting over a two-year period. Stewards Ltd. has a December 31 year-end. The SARs have an exercise price of $20 and they expire on December 31, Year 7. During Year 1, 1,200 SARs were forfeited, due to some employees leaving the company. A total of 4,000 SARs were exercised on September 30, Year 3, and a further 7,500 were exercised on June 15, Year 4. The remaining SARs expired on December 31, Year 4. What will the compensation expense, cash payments, and SAR asset reporting be over the relevant periods?

Explore the calculation of compensation expenses, cash payments, and SAR assets for Stewards Ltd.'s cash-settled SARs plan. Learn how forfeitures, vesting, and exercises are treated in this corporate scenario. Detailed market price analysis for Years 1-4 provided.

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