Under its executive stock option plan, national corporation granted 30 million options on january 1, 2018, that permit executives to purchase 30 million of the company’s $1 par common shares within the next six years, but not before december 31, 2020 (the vesting date). the exercise price is the market price of the shares on the date of grant, $25 per share. the fair value of the options, estimated by an appropriate option pricing model, is $3 per option. no forfeitures are anticipated. 1. ignoring taxes, what is the total compensation cost pertaining to the stock options? 2. ignoring taxes, what is the effect on earnings in the year after the options are granted to executives? (for all requirements, enter your answer in millions (i. e., 10,000,000 should be entered as

Bridgeport company began operations at the beginning of 2018. the following information pertains to this company. 1. pretax financial income for 2018 is $115,000. 2. the tax rate enacted for 2018 and future years is 40%. 3. differences between the 2018 income statement and tax return are listed below: (a) warranty expense accrued for financial reporting purposes amounts to $7,500. warranty deductions per the tax return amount to $2,200. (b) gross profit on construction contracts using the percentage-of-completion method per books amounts to $94,700. gross profit on construction contracts for tax purposes amounts to $67,100. (c) depreciation of property, plant, and equipment for financial reporting purposes amounts to $61,800. depreciation of these assets amounts to $75,700 for the tax return. (d) a $3,600 fine paid for violation of pollution laws was deducted in computing pretax financial income. (e) interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,500. 4. taxable income is expected for the next few years. (assume (a) is short-term in nature; assume (b) and (c) are long-term in nature.) (a) prepare the reconciliation schedule for 2017 and future years. (b) prepare the journal entry to record income tax expense for 2017. (c) prepare the income tax expense section of the income statement beginning with “income before income taxes.” (d) determine how the deferred taxes will appear on the balance sheet at the end of 2017.