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On January 2, 2017, Dwyer Corporation granted 10,000 nonqualified stock options each to four of its key executives (40,000 options in total). Under the terms of the option plan, upon exercise, each executive will pay the exercise price of $10 per share of common stock ($1 par value). The options were exercisable after January 1, 2020, and the executives were required to be employees of Dwyer at the date of exercise. The Black-Scholes value of the option on the grant date is $12.50. Three employees exercised options for 30,000 shares of stock on January 2, 2021. Dwyer has a tax rate of 35% in all years. Relevant dates and stock prices are as follows $ 10 January 2, 2017 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 January 2, 2021 December 31, 2021 26 26 25 Prepare a schedule to show how the January 2, 2021, option exercise affects Dwyer's 2021 income tax expense. (Amounts to be deducted should be indicated by a minus sign.) Income tax expense-deferred Income tax expense-current Net increase (reduction) in tax expense On January 2, 2017, Dwyer Corporation granted 10,000 nonqualified stock options each to four of its key executives (40,000 options in total). Under the terms of the option plan, upon exercise, each executive will pay the exercise price of $10 per share of common stock ($1 par value). The options were exercisable after January 1, 2020, and the executives were required to be employees of Dwyer at the date of exercise. The Black-Scholes value of the option on the grant date is $12.50. Three employees exercised options for 30,000 shares of stock on January 2, 2021. Dwyer has a tax rate of 35% in all years. Relevant dates and stock prices are as follows $ 10 January 2, 2017 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 January 2, 2021 December 31, 2021 26 26 25 Prepare a schedule to show how the January 2, 2021, option exercise affects Dwyer's 2021 income tax expense. (Amounts to be deducted should be indicated by a minus sign.) Income tax expense-deferred Income tax expense-current Net increase (reduction) in tax expense

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