311-Chapter 4 In Class Solutions

311-Chapter 4 In Class Solutions - ACC 311 Gross Income...

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Unformatted text preview: ACC 311 Gross Income Problem Interest income : DeKalb Bank $ 650 Life insurance proceeds Interest income = $6,500 ($50,000/10 years) 1,500 = $6,500 - $5,000 Illinois tax refund 35 $2,185 Dividend income : Commonwealth Edison ordinary dividend $300 (50% x $600) Paramount Corp. ordinary dividend 100 Billie Jean Corp. ordinary dividend 450 Billie Jean Corp. ordinary dividend 4,000 4,850 (Bargain purchase: $8,500 - $4,500) Fixed Annuity Income : 297 Excluded portion: $8,000 = $67 (10 x 12) Included: [($100-$67) x 9] = $297 Gift of Paramount Corporation stock excluded-0- Gross Income $7,332 ACC 311 Fringe Benefit Problem Blue Cross/Blue Shield medical insurance premiums excluded $ -0- Personal-use of computer (de minimus) excluded-0- Paid subscriptions to business journals excluded -0- Paid subscriptions to personal journals 100 Free flight on corporate jet 225 Pension plan contribution made by corporation excluded-0- Ordinary (whole-life) insurance premium 5,000 Gross Income $ 5,325 ACC 311...
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311-Chapter 4 In Class Solutions - ACC 311 Gross Income...

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