Assume that on January 1, year 1, XYZ Corp. issued 1,000 nonqualified stock options with an estimated value of $4 per option. Each option entitles the owner to purchase one share of XYZ stock for $14 a share (the per share price of XYZ stock on January 1, year 1, when the options were granted). The options vest 25 percent a year (on December 31) for four years (beginning with year 1). All 500 stock options that had vested to that point were exercised in year 3 when the XYZ stock was valued at $20 per share. No other options were exercised in year 3 or year 4. Identify XYZs year 1, 2, 3, and 4 tax deductions and book-tax difference (identify as permanent and/or temporary) associated with the stock options under the following alternative scenarios: (Do not round any division. Round other intermediate computations to the nearest whole dollar amount. Input all amounts as positive values. Leave no answer blank. Enter zero if applicable.)

ASC 718 does not apply to the stock options.

ASC 718 applies to the stock options.

Complete the following table.

Please help me with this problem, I have done the math and entered 1000 in each of the boxes as it says 1000 each year for the 4 years but it comes up wrong.

Answer is not complete Year 3 Temp/Perm Book-Tax Fav Unfav lempiPerm Book-Tax Book-Tax Book-Tax Favl Unfav Temp Pem FavlUnfav Templ Diff NA V NA V NVA v NA V s 3.000 Favorable Permanent V 0 NTA NA ov Nonqualified Stock Options S Under ASC 718 unfavorable Temporary s 1,000 Favorable V permanent Unfavorable Temporary v S Nonqualified Stock Options Unfavorable Temparary Favorable v Temporary