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Spring 2011 Simulations Test I

# Spring 2011 Simulations Test I - Spring 2011 Simulations...

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Spring 2011, Simulations Test I Valrie Chambers, Accounting 3321 Using Excel and/or Word, submit the answers to the following questions, showing all work: 1. 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. 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. 3. Wendell is an executive with CFO Tires. At the beginning of this year the corporation loaned Wendell \$50,000 at an interest rate of one percent. Wendell would have paid interest of \$2,500
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