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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