Martin Corporation Granted a Nonqualified Stock Option to Employee Caroline

question 63

Multiple Choice

Martin Corporation granted a nonqualified stock option to employee Caroline on January 1,2011. 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 1,2014 when the stock's FMV was $250. Caroline sells the stock on September 5,2015 for $300 per share. Martin Corporation will be allowed a deduction of

• A)$150,000 in 2011.
• B)$100,000 in 2014.
• C)$50,000 in 2015.
• D)$100,000 in 2014 and $50,000 in 2015.

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Definitions:

Autonomous Motivation

Motivation that originates internally, driving individuals to engage in activities for the inherent satisfaction or personal reward they provide.

Competence

The ability to do something successfully or efficiently, involving knowledge, skill, and aptitude.

Relatedness

The need to have meaningful connections with others, influencing one's social interactions and sense of belonging.

Cultures

The shared values, customs, social behaviors, and artifacts of a group of people that differentiate them from other groups.