at its annual meeting in june 2016 the shareholders of rusylvia ltd rusylvia approved a plan allowing the companys board of directors to grant stock options to/

Required:
a. Prepare Rusylvia’s income statement for the year ended March 31, 2017,
i. Assuming that the options are expensed.
ii. Assuming that the options aren’t expensed.
b. Calculate basic earnings per share and return on shareholders’ equity, assuming both that the value of the stock options is expensed when granted, and assuming it isn’t expensed.
c. What effect do the two treatments for employee stock options have on cash flow?
d. Which accounting approach do you think Rusylvia’s managers would prefer?
Explain.
e. Which approach do you think gives a better representation of Rusylvia’s economic performance?
f. If Rusylvia didn’t accrue the cost of the options in its financial statements, what information would you want disclosed about them? Explain.