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Citron Inc. offers an employee stock option plan (ESOP) to several of its senior executives....

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Accounting

Citron Inc. offers an employee stock option plan (ESOP) to several of its senior executives. 20,000 options were granted on January 1, 20X5, under this plan. The exercise price of the options was $25 per share. They vested two years from the grant date. 100% of the options vested. Citron maintains a separate contributed surplus account for expired options. Other information about the ESOP follow:

* The fair value of the ESOP using an appropriate option-pricing model was $300,000.
* On April 1, 20X7, a total of 7,000 options were exercised. The market price of Citrons shares at this date was $31.
* On August 1, 20X8, a total of 10,500 options were exercised. The market price of Citrons shares at this date was $33.
* On December 31, 20X9, the remaining options expired. The market price of Citrons shares at this date was $34.

On December 31, 20X9, when the unexercised options expired, what amount should have been credited to the contributed surplus expired stock options account?

a.

$85,000

 b.

$0

 c.

$37,500

 d.

$62,500

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