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What is the book-tax difference associated with the stock

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Reference no: EM132990249

Problem 1: Orange Inc. issued 25,000 nonqualified stock options valued at $50,000 (in total). The options vest over two years-half in 2018 (the year of issue) and half in 2019. One thousand options are exercised in 2019 with a bargain element on each option of $8. What is the 2019 book-tax difference associated with the stock options?

Option 1: $17,000 unfavorable.
Option 2: $17,000 favorable.
Option 3: $25,000 unfavorable.
Option 4: $25,000 favorable.
Option 5: None of the choices are correct.

Reference no: EM132990249

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