Martin Corporation granted a nonqualified stock option to employee Caroline on January 1, 2013. The option price was $150, and the FMV of the Martin stock was also $150 on the grant date. The option allowed Caroline to purchase 1,000 shares of Martin stock. The option itself does not have a readily ascertainable FMV. Caroline exercised the option on August 1, 2018, when the stock's FMV was $250.
Caroline sells the stock on September 5, 2019, for $300 per share. Martin Corporation will be allowed a deduction of
A) $150,000 in 2013.
B) $100,000 in 2018.
C) $50,000 in 2019.
D) $100,000 in 2018 and $50,000 in 2019.
B) $100,000 in 2018.
The employer is allowed a deduction equal to the employee income recognized on the exercise date (i.e., the number of shares times the spread between the FMV at exercise and the exercise price).
You might also like to view...
Our general idea of who we are as people is known as our ______.
a. self-esteem b. self-concept c. self-image d. possible self
The operating cycle for a merchandiser that sells only for cash moves from:
A. Purchases of merchandise to inventory to accounts receivable to cash sales. B. Inventory to purchases of merchandise to cash sales. C. Accounts receivable to inventory to cash sales. D. Accounts receivable to purchases of merchandise to inventory to cash sales. E. Purchases of merchandise to inventory to cash sales.
Whenever possible, you should work to ________________ false subjects in your writing
a. clarify b. use and repeat c. eliminate d. highlight
Relevant revenues and costs focus on:
A) activities that occurred in the past B) monies already earned and/or spent C) last year's net income D) differences between the alternatives being considered