Spring 2011 #1 answers - Essay Questions 86 This year Ann...

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Essay Questions 86. This year Ann has the following stock transactions. What amount is included in her gross income if Ann paid a $200 selling commission for each sale? $2,100. ATT: ($9,500 - $200) - $7,500 = $1,800. Dell: ($13,000 - $200) - $12,500 = $300. Feedback: the increase in value in the IBM stock is not yet realized. AACSB: Analytic AACSB: Reflective thinking AICPA: Critical thinking Bloom's: Application Learning Objective: 05-01 Apply the concept of realization and explain when taxpayers recognize gross income. Level of Difficulty: Medium 88. Henry works part-time on auto repairs and restoration projects. This year Henry was paid $5,400 for repairs to his neighbor's auto. Henry's neighbor promised to pay Henry another $2,200 in cash next year. Henry's brother borrowed $4,100 in cash in December of this year and gave him a negotiable promissory note for $4,300 due in three months with interest. Henry sold the note in January for $3,500. Finally, Henry restored a car for the football coach. The coach paid him with a pass to next year's football games. The pass is worth $750. Compute Henry's gross income assuming that he uses the cash basis of accounting. $5,400 + $750 = $6,150
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This note was uploaded on 03/27/2012 for the course ACCT 3321 taught by Professor Chambers during the Spring '09 term at Texas A&M University, Corpus Christi.

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Spring 2011 #1 answers - Essay Questions 86 This year Ann...

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