Eight years ago, Killer Bees Inc. granted Ms. Johnson a nonqualified option to purchase 1,000 shares of Acnex stock at $44 per share. On date of grant, the market price was $42 per share. This year, Ms. Johnson exercised the option when the market price was $75 per share. Which of the following statements is TRUE?

Select one:

a. Ms. Johnson recognizes $31,000 ordinary income, and Acnex is allowed a $31,000 deduction.

b. Ms. Johnson recognizes $31,000 ordinary income, and Acnex is allowed a $44,000 deduction.

c. Ms. Johnson recognizes $33,000 ordinary income, and Acnex is allowed a $33,000 deduction.

d. Ms. Johnson recognizes $33,000 ordinary income, and Acnex is allowed a $44,000 deduction.