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For the following scenario, determine the dollar amount of the book-tax difference (if any) written as a positive number On January 1, 2015, Landmark Corporation offered its CFO 2,500 NQOs options to purchase the company's at the same price off public market on that day, $11/share, at any date in the future after the CFO vests. The CFO will vest 25% of its options in 2015. and vest the remaining portion in 2017. The CFO promptly exercised all of his options on December 31, 2017 when he was 100 urned around and sold all the shares for $15/share on the public market. Assume that on the grant date, Landmark Corporation alue of the options would be $4/share. The company uses a calendar year tax period. 1. The book-tax differenco in

For the following scenario, determine the dollar amount of the book-tax difference (if any) written as a positive number On January 1, 2015, Landmark Corporation offered its CFO 2,500 NQOs options to purchase the company's at the same price off public market on that day, $11/share, at any date in the future after the CFO vests. The CFO will vest 25% of its options in 2015. and vest the remaining portion in 2017. The CFO promptly exercised all of his options on December 31, 2017 when he was 100 urned around and sold all the shares for $15/share on the public market. Assume that on the grant date, Landmark Corporation alue of the options would be $4/share. The company uses a calendar year tax period. 1. The book-tax differenco in

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 21 For the following scenario, determine the dollar amount of the book-tax difference (if any) written as a positive number in 2016. On January 1, 2015, Landmark Corporation offered its CFO 2,500 NQOs options to purchase the company's at the same price offered by the public market on that day, $11/share, at any date in the future after the CFO vests. The CFO will vest 25% of its options in 2015, 25% in 2016, and vest the remaining portion in 2017. The CFO promptly exercised all of his options on December 31, 2017 when he was 100% vested and turned around and sold all the shares for $15/share on the public market. Assume that on the grant date, Landmark Corporation estimated the value of the options would be $4/share. The company uses a calendar year tax period. OI. The book-tax difference in 2016 is $10,000. O II. The book-tax difference in 2016 is $2,500. O III. None of the answers given here. O IV. The book-tax difference in 2016 is $5,000. OV. The book-tax difference in 2016 is $0.
Transcribed Image Text:Question 21 For the following scenario, determine the dollar amount of the book-tax difference (if any) written as a positive number in 2016. On January 1, 2015, Landmark Corporation offered its CFO 2,500 NQOs options to purchase the company's at the same price offered by the public market on that day, $11/share, at any date in the future after the CFO vests. The CFO will vest 25% of its options in 2015, 25% in 2016, and vest the remaining portion in 2017. The CFO promptly exercised all of his options on December 31, 2017 when he was 100% vested and turned around and sold all the shares for $15/share on the public market. Assume that on the grant date, Landmark Corporation estimated the value of the options would be $4/share. The company uses a calendar year tax period. OI. The book-tax difference in 2016 is $10,000. O II. The book-tax difference in 2016 is $2,500. O III. None of the answers given here. O IV. The book-tax difference in 2016 is $5,000. OV. The book-tax difference in 2016 is $0.
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