Multiple Choice
On December 31, 2018, Khors Company issued nonqualified stock options to its CEO.The options fully vest on December 31, 2019, and the options were valued at $50,000 on the grant date.Ms.Svaro exercised the options on December 31, 2019.The total bargain element at the time of exercise was $40,000.For 2019, what is the nature of the book-tax difference due to the options exercised?
A) Favorable and temporary.
B) Favorable and permanent.
C) Unfavorable and temporary.
D) Unfavorable and permanent.
E) Not enough information to determine.
Correct Answer:
Verified
Correct Answer:
Verified
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