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  3. 1. 2. this yeac, gogo,...

1. 2. This yeac, Gogo,...

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Accounting

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This yeac, Gogo, Incorporated granted a nonqualified stock option to Mwana to buy 9,000 shares of Gogo stock for $8.7 per share for five years. At date of grant, Gogo stock was selling on a regional securities market for $8.36 per share. Gogo recorded $34,200 compensation expense for the estimated value of the option. Required: a. How much income must Mwana recognize this year? b. Can Gogo deduct the $34,200 expense on this year's tax return? c. Assuming a 21 percent tax rate, compute Gogo's deferred tax asset or deferred tax liability (identify which) resulting from the $34,200 compensation expense. Gily is the PFO of Petro, Incorporated This year, Gilly's compensation package was $900,000 which included $720,000 salary and an accrued, unfunded liability to pay the $180,000 balance upon retirement at age 60 . Petro, Incorporated pays $180,000 deferred compensation to Gilly in 2027, the year of retirement. Required: a. How much compensation income does Gilly recognize in 2027? b. What is Petro's 2027 tax deduction for the payment to Mr. Gilly? c. What is the effect of the payment on Petro's 2027 book income and deferred taxes? Assume a 21 percent tax rate. Complete this question by entering your answers in the tabs below

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