however, RC concluded that S200,000 for boo and they required RC to write down the goodwill by $200,000 purposes d) a) What book-tax difference associated with its goodwill should RC year 1? Is it favorable or unfavorable? Is it permanent or temp associated with its goodwill should Rc report i year 2? Is it favorable or unfavorable? Is it permanent or temporary? estimated value of S10 per option. Each option entitles the owner to purchase e) 51. Assume that on January I, year 1, ABC Inc. issued 5,000 stock options with a one share of ABC stock for $25 a share (the per share price of ABC stockn January 1, year 1, when the options were granted). The options vest 50 percent at the end of the day on December 31, year 1, and 50 percent at the end of the f) day on December 31, year 2. All 5,000 stock options were exercised in year 3 when the ABC stock was valued at S31 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: 54. W a) The stock options are incentive stock options andA of FAS 123R) does not apply to the options. b) The stock options are nonqualified stock options and ASC 718 does not apply to the options. c) The stock options are incentive stock options and ASC 718 applies to the options d) The stock options are nonqualified stock options and ASC 718 applies to the options. 52. Assume that on January 1, year 1, XYZ Corp. issued 1,000 nonqualified stoc options with an estimated value of $4 per option. Each option entitles the own