Martin Corporation Granted a Nonqualified Stock Option to Employee Caroline

question 11

Multiple Choice

Martin Corporation granted a nonqualified stock option to employee Caroline on January 1,2012.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 1,2015 when the stock's FMV was $250.Caroline sells the stock on September 5,2016 for $300 per share.Martin Corporation will be allowed a deduction of

• A)$150,000 in 2012.
• B)$100,000 in 2015.
• C)$50,000 in 2016.
• D)$100,000 in 2015 and $50,000 in 2016.

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Definitions:

Overregularizations

A language development error where children apply grammatical rules too broadly, often observed in early language learning.

Nativist Theory

This theory posits that certain skills or abilities are innate and hardwired into the brain at birth.

Interactionist Theories

Theories that explain human behavior and social phenomena through the interplay between individual actions and societal influences.

Social Interaction

The dynamic process by which people act and react in relation to others, shaping relationships and social structure through communication and behavioral cues.