Assume that on January 1. year 1 ABC Inc. issued 7.000 stock options with an estimated value of $8 per option. Each option entities the owner to purchase one share of ABC stock for $27 a share the per share price of ABC stock on January 1 year when the options were granted). The options vest at the end of the day on December 31, year 2. All 7,000 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 as favorable or unfavorable and as permanent 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 Temporary Unfavorable Permanent Year 1 Favorable! Unfavorable Book Tax Dit Year Favorable Unfavorable Temporary Permanent Book Tax Dil Book Tax Diff Temporary Permanent Under ASC 715 $ o Unfavorable Permanent 0 Unfavorable Permanent NA NA Incentive Stock Options Nonqualified Stock Options th $ Unfavorable Temporary Unfavorable Temporary $ 00 Favorable Temporary