Assume that on January 1 year 1. ABC Inc. issued 5,550 stock options with an estimated value of $10 per option. Each option entitles the owner to purchase one share of ABC stock for $27 a share the per share price of ABC stock on January 1 year 1, when the options were granted). The options vest at the end of the day on December 31, year 2. All 5,550 stock options were exercised in year 3 when the ABC stock was valued at $32 per share. Identify ABC's year 1, 2 and 3 tax deductions and book-tax differences indicate whether permanent and/or temporary associated with the stock options under the following alternative scenarios: Required: a. The stock options are incentive stock options b. The stock options are nonqualified stock options Complete the following table. (For all requirements, leave no answer blank. Enter zero if applicable and select "N/A" If no effect.) Answer is not complete. Year 2 Favorable Unfavorable Temporary Permanent Book Tax Duff Favorable Unfavorable Temporary! Permanent Favorable! Unfavorable Temp Perm Under ASC 718 Incentive Stock Options Nonqualified Stock Options Unfavorable Permanent $ 55,000 Unfavorable Permanent NA Unfavorable Temporary 527500 Utorate Temporary 527.500 Favorable Temporary