Using the income concepts presented in this chapter discuss, Ask an Expert

Accounting

Using the income concepts presented in this chapter, discuss whether the taxpayer has realized income in each of the following situations:

a. Adco Corporation pays the health insurance premiums for all its employees. Adrian is an employee of Adco. Health insurance premiums Adco pays for Adrian cost $1,150 for the current year.

b. The Sung Partnership buys a parcel of unimproved land for $32,000. Sung spends an additional $22,000 to put in roads and sewerage and to grade the property for subdividing. The property is subdivided into 15 lots and offered for sale at $10,000 per lot.

c. Doctors and nurses at Valley View Hospital are allowed to eat free of charge in the hospital cafeteria during their shifts. Sue, a doctor, eats meals valued at $1,900 dur- ing the current year.

d. Wayman wins the golf championship at his country club. In addition to a handsome trophy, he receives merchandise worth $500 for winning the tournament.

e. Rock signs a contract to play football for the Rangers. In addition to a salary of $1,000,000 per year for 5 years, he is to receive a signing bonus of $5,000,000 to be paid 10 years from the date the contract was signed.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91647706

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