Chapter 5Quiz

Chapter 5Quiz - Chapter 5 Quiz...

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Chapter 5 Quiz Started: February 18, 2012 4:00 PM Questions: 10  1.COMPREHENSIVE VOLUME CHAPTER 4—GROSS INCOME: CONCEPTS AND INCLUSIONS Question  MC #3 (Points: 2)  The Blue Utilities Company paid Sue $2,000 for the  right to lay an underground electric cable across her  property anytime in the future. 1. Sue must recognize $2,000 gross income in the  current year if the company did not install the cable  during the year. 2. Sue must recognize $2,000 gross income in the  current year regardless of whether the company  installed the cable during the year. 3. Sue is not required to recognize gross income from  the receipt of the funds, but she must reduce her cost  basis in the land by $2,000. 4. None of the above. 5. Sue must recognize $2,000 gross income in the  current year, and when the cable is installed, she must  reduce her cost basis in the land by $2,000. Save Answer 2.COMPREHENSIVE VOLUME CHAPTER 4—GROSS INCOME: CONCEPTS AND INCLUSIONS Question  MC #21 (Points: 2)  Mike contracted with Kram Company, Mike’s controlled  corporation. Mike was a medical doctor and the  contract provided that he would work exclusively for 
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the corporation. No other doctor worked for the  corporation. The corporation contracted to perform an  operation for Rosa for $8,000. The corporation paid  Mike $6,500 to perform the operation under the terms  of his employment contract. 1. Mike must recognize the $8,000 gross income  because he provided the service. 2. Mike must recognize $8,000 gross income since the  patient obviously wanted him to perform the operation. 3. None of the above. 4. Mike’s gross income is $6,500. 5. The Kram Company corporation’s gross income is 
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This note was uploaded on 03/07/2012 for the course BUS 603 taught by Professor Rosnin during the Spring '12 term at Rutgers.

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Chapter 5Quiz - Chapter 5 Quiz...

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