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the following excerpts are from the 2004 financial statements of microsoft microsoft 4244251

The following excerpts are from the 2004 financial statements of Microsoft.Microsoft grants employee stock options (ESO) to employees as part of its compensation plan. These ESOs have an exercise price equal to the market price on the date of grant. Accordingly, because Microsoft accounts for these ESOs using the intrinsic value method of APB Opinion No.25, no compensation expense is recognized in Microsoft’s financial accounting records.For income tax purposes, these ESOs are classified as “nonqualified stock options.”This results in the following income tax treatment:• For Microsoft employees: Taxable income is created on the date the options are exercised. The amount of the taxable income is equal to the difference between the exercise price and the market price on the exercise date.• For Microsoft: Microsoft is allowed a tax deduction in the same amount (and at the same time) as the taxable income that is reported by the employees. Using the Microsoft financial statement information, answer the following questions.1. Microsoft reports that its effective tax rate in 2004 was 33.0%. What was the amount of the income tax deduction Microsoft took in 2004 as a result of the exercise of employee stock options (ESO) by Microsoft employees during the year?2. Microsoft reports that it had 57,000 full-time employees as of the end of fiscal 2004. What was the average ESO-related taxable income per employee?3. Why is the $1.100 billion in stock option income tax benefits added in the computation of operating cash flow for 2004?4. What was the total amount of Microsoft’s current taxes for 2004? This is the number that would be reported as “Total tax for the year” on Microsoft’s worldwide income tax return (if there was such a thing). (Note: If you think this question is easy, think about it somemore.)
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The following excerpts are from the 2004 financial statements of

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