he questions below are based on the following information: Carminder is an employee of a public Canadian corporation. On April 1, 2021 she was granted stock options to purchase 5,000 shares of her employer's common shares at a price of $75 per share. She exercised her options and purchased 5,000 shares n November 1, 2021. She sold all of her shares on February 1, 2022. The market price of her employer's common shares was $74 per share on April 1, 2021; $79 per share on November 1, 2021 and $85 per share on February 1, 2022. he effect on her 2022 net and taxable income is: crease in net and taxable income of $25,000. crease in net and taxable income of $15.000. crease in net income of $30,000 and an increase in taxable income of $15,000. crease in net income of $50,000 and an increase in taxable income of $25,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Question

ll.

Subject

Accounting 

The questions below are based on the following information:
Parminder is an employee of a public Canadian corporation. On April 1, 2021 she was granted stock options to purchase 5,000 shares of her employer's common shares at a price of $75 per share. She exercised her options and purchased 5,000 shares
on November 1, 2021. She sold all of her shares on February 1, 2022. The market price of her employer's common shares was $74 per share on April 1, 2021; $79 per share on November 1, 2021 and $85 per share on February 1, 2022.
The effect on her 2022 net and taxable income is:
a
increase in net and taxable income of $25,000.
b.
increase in net and taxable income of $15,000.
C.
increase in net income of $30,000 and an increase in taxable income of $15,000.
d
increase in net income of $50,000 and an increase in taxable income of $25,000.
Transcribed Image Text:The questions below are based on the following information: Parminder is an employee of a public Canadian corporation. On April 1, 2021 she was granted stock options to purchase 5,000 shares of her employer's common shares at a price of $75 per share. She exercised her options and purchased 5,000 shares on November 1, 2021. She sold all of her shares on February 1, 2022. The market price of her employer's common shares was $74 per share on April 1, 2021; $79 per share on November 1, 2021 and $85 per share on February 1, 2022. The effect on her 2022 net and taxable income is: a increase in net and taxable income of $25,000. b. increase in net and taxable income of $15,000. C. increase in net income of $30,000 and an increase in taxable income of $15,000. d increase in net income of $50,000 and an increase in taxable income of $25,000.
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