On October 2,2013,Miriam Sells 1,000 Shares of Stock at $20

question 18

Short Answer

On October 2,2013,Miriam sells 1,000 shares of stock at $20 per share.Miriam acquired the stock on November 12,2012,when she exercised her option to purchase the shares through her company's incentive stock option plan.The exercise price was $11 per share and the fair market value of the stock at the date of exercise was $14 per share.For 2013,Miriam must report
$\begin{array}{ll}&\text { Ordinary } & \text { Capital } \\&\text { Income }&\text { Gain } \\a.&\$3,000&\$6,000\\\text { b. } &\$ 6,000 & \$ 3,000 \\\text { c. }& \$ 9,000 & \$-000 \\\text { d. }& \$-0- & \$ 9,000\end{array}$

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Definitions:

Group Formation

The process by which companies come together to form a conglomerate, alliance, or any structured business entity with common objectives.

Potential Benefits

Possible advantages or improvements that may arise from a particular action, investment, or decision, often evaluated in the planning stages.

AASB 127

The Australian Accounting Standards Board guideline that outlines the accounting and disclosure requirements for investments in associates and joint ventures.

Consolidated Financial Statements

Financial statements that represent the consolidation of a corporation and all its subsidiaries, portraying the financial position and performance of the company as a single entity.