In 2009, Z Received Non-Qualified Stock Options as Part of Her

question 15

Multiple Choice

In 2009, Z received non-qualified stock options as part of her compensation from U Corporation.When granted, the options had no ascertainable value.In 2012, Z exercised the options and purchased 1,000 shares of U stock, market value $100 per share, for the option price of $70 per share.Accordingly,

• A)In 2012, Z must recognize $100,000 in ordinary income.
• B)In 2012, Z must recognize $70,000 in ordinary income.
• C)In 2012, Z must recognize $30,000 in ordinary income.
• D)None of the above is correct.

---

Definitions:

Standard Score

A score that has been transformed to fit into a standard scale, allowing comparison across different tests or assessments.

Sten Score

A standardized test score that typically ranges from 1 to 10, used to compare an individual's performance on a test to a normative population.

Standard Deviation

It measures the dispersion or spread of a data set, indicating how much the values in the set deviate from the mean on average.

Postformal Thought

A proposed adult stage of cognitive development, following Piaget’s four stages, that goes beyond adolescent thinking by being more practical, more flexible, and more dialectical (i.e., more capable of combining contradictory elements into a comprehensive whole).