Ralph received 100 nonqualifying stock options (NQOs) from his employer, Muncie Corporation, on June 30, 2021. Each option allows him to buy one share of stock for $20, the market value of the stock on the date the options were granted. Ralph exercises all of his options on July 15, 2022, when the market value of the stock was $32 per share. Ralph sells of his stock on August 1, 2023, for $36 per share. Which statement is correct?

Group of answer choices

Ralph reports $1,200 (100 x $12) of compensation income on July 15, 2022.

Ralph reports $3,200 (100 x $32) of compensation income on July 15, 2022.

Ralph reports $2,000 (100 x $20) of compensation income on June 30, 2021.

Ralph reports $3,600 (100 x $36) of compensation income on July 15, 2022.