Orange Inc

Orange Inc. issued 20,000 nonqualified stock options valued at $40,000 (in total) . The options vest over two years - half in 2014 (the year of issue) and half in 2015. One thousand options are exercised in 2015 with a bargain element on each option of $6. What is the 2015 book-tax difference associated with the stock options?

A) $14,000 unfavorable
B) $14,000 favorable
C) $20,000 unfavorable
D) $20,000 favorable
E) None of these

Correct Answer:

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