Martin Corporation Granted a Nonqualified Stock Option to Employee Caroline

question 6

Multiple Choice

Martin Corporation granted a nonqualified stock option to employee Caroline on January 1,2011. 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 1,2014 when the stock's FMV was $250.If Caroline sells the stock on September 5,2015 for $300 per share,she must recognize

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Definitions:

Rent for Equipment

The cost incurred for borrowing equipment necessary for the operations of a business or project.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership equity of the shareholders.

Assets

Economic resources owned or controlled by a business or individual that are expected to provide future benefits.

Stockholders' Equity

The value of a company's assets minus its liabilities, representing the ownership interest of the shareholders.