A. On 1/1/Y1, the firm issued 10,000 nonqualified stock options to employees. The shares are currently trading for $10 per share. The option exercise price is set equal to $10 and the fair value of each option is $3. The vesting service period for the stock options is 18 months. The firm receives a deduction equal to the employee’s gain on the exercise of the option when the option is exercised. At the end of year 2 employees exercised 7,000 options. The fair value of the firm’s stock on this date is $19 per share. B. On 1/1/Y1 the firm purchased 1,000 shares of D Corp. for $30 per share. The shares are classified as minority passive investments. Gains/Losses are taxable/deductible when the shares are sold. C. On 1/1/Y1 the firm paid a $90,000 premium for a 3-year insurance policy that expires 12/31/Y3. The insurance premiums are deductible when paid. D. During Y2, the firm accrued charges of $32,000 that will be deductible when paid in Y3. E. Use a domestic (US) tax rate of 20% and a foreign tax rate of 12%. Assume all book/tax Differences relate to domestic taxable income. F. Round all dollar amounts to the nearest dollar.