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Business, 17.08.2019 19:10 Blakemiller2020

On june 1, year 2, oak corp. granted stock options to certain key employees as additional compensation. the options were for 1,000 shares of oak's $2 par value common stock at an option price of $15 per share. market price of this stock on june 1, year 2, was $20 per share. the options were exercisable beginning january 2, year 3, and expire on december 31, year 4. on april 1, year 3, when oak's stock was trading at $21 per share, all the options were exercised. oak uses the intrinsic method of accounting for stock option plans. what amount of pretax compensation should oak report in year 2 in connection with the options?

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