Liberty ACCT 401 Assignment Chapter 5 Problems Spring 2015

| June 8, 2016

Question
(ACCT 401 – Spring B 2015 1)

Assignment:

Chapter 5

1.

Award: 5 out of 5.00 points

Problem 5-55 (LO 5-2)

For each of the following independent situations, indicate the amount the taxpayer must include in gross income:

a.

Phil won $790 in the scratch-off state lottery. There is no state income tax.

b.

Ted won a compact car worth $18,700 in a TV game show. Ted plans to sell the car next year.

c.

Al Bore won the Nobel Peace Prize of $585,000 this year. Rather than take the prize, Al designated that the entire award should go to Weatherhead Charity, a tax-exempt organization.

d.

Jerry was awarded $5,500 from his employer, Acme Toons, when he was selected most handsome employee for Valentine’s Day this year.

e.

Ellen won a $1,950 cash prize in a school essay contest. The school is a tax-exempt entity, and Ellen plans to use the funds to pay her college education.

f.

Gene won $760 in the office March Madness pool.

2.

Award: 5 out of 5.00 points

Problem 5-72 (LO 5-3)

Dontae’s employer has offered him the following employment package.

Salary

$ 450,000

Health insurance

15,500

Dental insurance

1,050

Membership to Heflin Country Club

17,000

Season tickets to Atlanta Braves games

5,100

Tuition reimbursement for graduate courses

4,150

Housing allowance (for a McMansion in his
neighborhood of choice)

37,000

What is Dontae’s gross income from his employment?

3.

Award: 5 out of 5.00 points

Problem 5-63 (LO 5-3)

For each of the following situations, indicate how much the taxpayer is required to include in gross income:

a.

Steve was awarded a $9,200 scholarship to attend State Law School. The scholarship pays Steve’s tuition and fees.

b.

Hal was awarded a $19,400 scholarship to attend State Hotel School. All scholarship students must work 40 hours per week at the School residency during the term.

c.

Bill was the recipient of an athletic scholarship that pays his $20,200 tuition to State University and provides him with a $840 per month stipend to pay for food and housing. The scholarship requires Bill to participate in athletic competition each term.

a.

How much of scholarship is Steve required to include in his gross income?

b.

What is the amount of scholarship Hal should include in his gross income?

c.

How much of scholarship and stipend (for 12 months) are to be included in Bill’s gross income?

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