On May 5,2011,Elton Corporation Granted Germaine an Option to Acquire $\begin{array} { l }&2012&2013\\a.&\$1,000&\$300\\b.&\$1,000&\$-0-\\c.&\$400&\$-0-\\d.&\$-0-&\$1,300\end{array}$

question 102

Short Answer

On May 5,2011,Elton Corporation granted Germaine an option to acquire 100 shares of the company's stock for $ 8 per share.The fair market price of the stock on the date of grant was $14.The stock requires that Germaine remain with the company for one year after the date of exercise.The option did not have a readily ascertainable fair market value.Germaine exercises the option on June 12,2012,when the fair market value of the stock is $18.On June 12,2013,the fair market value of the stock is $21 per share.How much must he report as income in 2012 and 2013?
$\begin{array} { l }&2012&2013\\a.&\$1,000&\$300\\b.&\$1,000&\$-0-\\c.&\$400&\$-0-\\d.&\$-0-&\$1,300\end{array}$

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Definitions:

Financial Plan

A comprehensive evaluation of an individual's or organization's current and future financial state by using current known variables to predict future income, asset values, and withdrawal plans.

Best Case Scenarios

Situations reflecting the most favorable or ideal outcomes of decisions, planning, or projections.

Asset Requirements

The minimum resources and assets needed for a business or investment to operate effectively and efficiently.

Financial Planning

The process of estimating the capital required and determining its competition, aiming to manage financial activities effectively for a person or organization.