Jennifer uses the cash method. Which of the following transactions result in gross income in the current year? Car, worth $7,000, received as a consulting fee $500 of interest credited to her checking account, but not withdrawn Wages payable from a corporation with ample funds, in which she is a 12 percent shareholder, unpaid at year-end Stock, worth $20,000, for services rendered, fully vested if Jennifer still works for the corporation in three years $700 of dental services (bill cancelled upon Jennifer’s estate planning advice to the dentist’s mother-in-law) Sale of a used car for a note due in one year, face value $3,000, fair market value $2,500. No elections were made
Jennifer uses the cash method. Which of the following transactions result in gross income in the current year? Car, worth $7,000, received as a consulting fee $500 of interest credited to her checking account, but not withdrawn Wages payable from a corporation with ample funds, in which she is a 12 percent shareholder, unpaid at year-end Stock, worth $20,000, for services rendered, fully vested if Jennifer still works for the corporation in three years $700 of dental services (bill cancelled upon Jennifer’s estate planning advice to the dentist’s mother-in-law) Sale of a used car for a note due in one year, face value $3,000, fair market value $2,500. No elections were made
Chapter3: Income Sources
Section: Chapter Questions
Problem 79P
Related questions
Question
Jennifer uses the cash method. Which of the following transactions result in gross income in the current year?
- Car, worth $7,000, received as a consulting fee
- $500 of interest credited to her checking account, but not withdrawn
- Wages payable from a corporation with ample funds, in which she is a 12 percent shareholder, unpaid at year-end
- Stock, worth $20,000, for services rendered, fully vested if Jennifer still works for the corporation in three years
- $700 of dental services (bill cancelled upon Jennifer’s estate planning advice to the dentist’s mother-in-law)
- Sale of a used car for a note due in one year, face value $3,000, fair market value $2,500. No elections were made
Expert Solution
Step 1 Introduction
If a business uses cash method, then the transaction is included in income only when it gets received in cash form.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT