What is the book-tax difference due to the options exercised

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Question - In January 2016, Khors Company issues nonqualified stock options to its CEO, Jenny Svaro. Because the company does not expect Ms. Svaro to leave the company, the options vest at the time they are granted with a total value of $50,000. In December of 2017, the company experiences a surge in its stock price, and Ms. Svaro exercises the options. The total bargain element at the time of exercise is $60,000. For 2017, what is the book-tax difference due to the options exercised?

10,000 unfavorable

10,000 favorable

50,000 unfavorable

60,000 favorable

Reference no: EM131696151

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