Martin Corporation Granted a Nonqualified Stock Option to Employee Caroline

question 1843

Multiple Choice

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) $100,000 in 2018 and $50,000 in 2019.
• B) $100,000 in 2018.
• C) $50,000 in 2019.
• D) $150,000 in 2013.

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Definitions:

Observing Limits Procedure

A method used in various fields to monitor and maintain the boundaries of acceptable or safe operations or behaviors.

Contingency Management

A behavioral therapy technique involving the reinforcement of desired behaviors and the withholding of reinforcement for undesired behaviors.

Client And Counselor

The dyadic relationship between a person seeking help (client) and the professional providing mental health services (counselor).

Pretreatment Phase

An initial stage in therapy focusing on assessment, building rapport, and setting goals before the main treatment begins.