Question 1

Lois,who is single,received $9,000 of Social Security benefits.She also received $25,000 from dividends,interest,and her employer's pension plan.If Lois sells a capital asset that produces a $1,000 recognized loss,Lois's taxable income will decrease by more than $1,000.

Accepted Answer

A) True 
 B)False

Question 2

The Maroon & Orange Gym,Inc. ,uses the accrual method of accounting.The corporation sells memberships that entitle the member to use the facilities at any time.A one-year membership costs $480 ($480/12 = $40 per month) ;a two-year membership costs $720 ($720/24 = $30 per month) .Cash payment is required at the beginning of the membership period.On July 1,2014,the company sold a one-year membership and a two-year membership.The company should report as gross income from the two contracts:

Accepted Answer

A)  $1,200 in 2014.
B)  $960 in 2014.
C)  $180 in 2016.
D)  $780 in 2015.
E)  None of these.F) C) and D)
G) A) and E)

Question 3

On a particular Saturday,Tom had planned to paint a room in his house,but his employer gave him the opportunity to work that day.If Tom works,he must hire a painter for $120.For Tom to have a positive cash flow from working and hiring the painter:

Accepted Answer

A)  Tom must earn more than $160 if he is in the 25% marginal tax bracket.
B)  Tom must earn at least $160 if he is in the 33% marginal tax bracket.
C)  Tom must earn at least $150 if he is in the 25% marginal tax bracket.
D)  Tom must earn at least $135 if he is in the 15% marginal tax bracket.
E)  None of these.F) A) and D)
G) B) and E)

Question 4

Turner,Inc. ,provides group term life insurance to the officers of the corporation only.Janet,a vice-president,received $450,000 of coverage for the year at a cost to Turner,Inc.of $5,600.The Uniform Premiums (based on Janet's age) are $15 a year for $1,000 protection.How much of this must Janet include in gross income this year?

Accepted Answer

A)  $0.
B)  $2,700.
C)  $5,600.
D)  $6,000.
E)  None of these.F) A) and B)
G) A) and D)

Exam 4: Gross Income: Concepts and Inclusions

Correct Answer
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On a particular Saturday,Tom had planned to paint a room in his house,but his employer gave him the opportunity to work that day.If Tom works,he must hire a painter for $120.For Tom to have a positive cash flow from working and hiring the painter:

Correct Answer
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Lois,who is single,received $9,000 of Social Security benefits.She also received $25,000 from dividends,interest,and her employer's pension plan.If Lois sells a capital asset that produces a $1,000 recognized loss,Lois's taxable income will decrease by more than $1,000.

Correct Answer
verified

Correct Answer
verified

Exam 4: Gross Income: Concepts and Inclusions

Correct AnswerverifiedShow Answer

On a particular Saturday,Tom had planned to paint a room in his house,but his employer gave him the opportunity to work that day.If Tom works,he must hire a painter for $120.For Tom to have a positive cash flow from working and hiring the painter:

Correct AnswerverifiedShow Answer

Lois,who is single,received $9,000 of Social Security benefits.She also received $25,000 from dividends,interest,and her employer's pension plan.If Lois sells a capital asset that produces a $1,000 recognized loss,Lois's taxable income will decrease by more than $1,000.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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