In January 2016,Khors Company Issues Nonqualified Stock Options to Its

question 47

Multiple Choice

In January 2016,Khors Company issues nonqualified stock options to its CEO,Jenny Svaro.Because the company does not expect Ms.Svaro to leave the company,the options vest at the time they are granted with a total value of $50,000.In December of 2017,the company experiences a surge in its stock price,and Ms.Svaro exercises the options.The total bargain element at the time of exercise is $60,000.For 2017,what is the book-tax difference due to the options exercised?

• A) 10,000 unfavorable.
• B) 10,000 favorable.
• C) 50,000 unfavorable.
• D) 60,000 favorable.

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Definitions:

Tumor Suppressor Genes

Genes that help regulate cell growth and division, and can prevent the development of tumors by repairing DNA, promoting cell death, or ensuring cells do not proliferate uncontrollably.

Apoptosis Initiator

A molecule or signaling pathway that triggers the process of programmed cell death, crucial for development and maintaining homeostasis.

Apoptosis

A form of programmed cell death that occurs in multicellular organisms, helping to eliminate cells that are no longer needed or are harmful.

Proto-oncogenes

Proto-oncogenes are normal genes that can become oncogenes when mutated or expressed at high levels, potentially leading to cancer.