On June 1,2017,Sutton Corporation Grants Anne an Option Under Its

question 103

Multiple Choice

On June 1,2017,Sutton Corporation grants Anne an option under its nonqualified stock option plan to acquire 300 shares of the company's stock for $12 per share.The fair market price of the stock on the date of grant is $18.The fair market value of the option is $4.How much must Anne report as income at the date of grant?

• A)$-0-
• B)$1,200
• C)$1,800
• D)$3,600
• E)$5,400

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Definitions:

Adaptive System

A system that is capable of adjusting its behavior or structure based on changes in its environment or internal state.

Regulated Market

A market that is controlled or supervised by rules and laws designed to protect consumers and fair competition.

Offeree

The person or party to whom an offer is made in a contract situation.

Mutual Promises

Agreements where both parties commit to perform or refrain from specific actions, forming the basis of a contract.