Classify each of the following cases as "Included in" or "Excluded from" gross income. Included in/Excluded from Gross Income a. Eloise received $150,000 in the settlement of a sex discrimination case against her former employer. b. Nell received $10,000 for damages to her personal reputation. Nell also received $40,000 in punitive damages. c. Orange Corporation, an accrual-basis taxpayer, received $50,000 from a lawsuit it filed against its auditor, who overcharged for services rendered in a previous year. d. Beth received $10,000 in compensatory damages in a lawsuit she filed against a tanning parlor for severe burns she received from using the parlor's tanning equipment. Beth also received $30,000 in punitive damages in the lawsuit against the tanning parlor. e. Joanne received compensatory damages of $75,000 from a cosmetic surgeon who botched her nose job. Joanne also received $300,000 in punitive damages from the cosmetic surgeon who botched her nose job.
Classify each of the following cases as "Included in" or "Excluded from" gross income. Included in/Excluded from Gross Income a. Eloise received $150,000 in the settlement of a sex discrimination case against her former employer. b. Nell received $10,000 for damages to her personal reputation. Nell also received $40,000 in punitive damages. c. Orange Corporation, an accrual-basis taxpayer, received $50,000 from a lawsuit it filed against its auditor, who overcharged for services rendered in a previous year. d. Beth received $10,000 in compensatory damages in a lawsuit she filed against a tanning parlor for severe burns she received from using the parlor's tanning equipment. Beth also received $30,000 in punitive damages in the lawsuit against the tanning parlor. e. Joanne received compensatory damages of $75,000 from a cosmetic surgeon who botched her nose job. Joanne also received $300,000 in punitive damages from the cosmetic surgeon who botched her nose job.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Classify each of the following cases as "Included in" or "Excluded from" gross income.
Included in/Excluded from
Gross Income
a. Eloise received $150,000 in the settlement of a sex discrimination case against her former employer.
b. Nell received $10,000 for damages to her personal reputation.
Nell also received $40,000 in punitive damages.
c. Orange Corporation, an accrual-basis taxpayer, received $50,000 from a lawsuit it filed against its auditor, who overcharged for services rendered in a previous year.
d. Beth received $10,000 in compensatory damages in a lawsuit she filed against a tanning parlor for severe burns she received from using the parlor's tanning equipment.
Beth also received $30,000 in punitive damages in the lawsuit against the tanning parlor.
e. Joanne received compensatory damages of $75,000 from a cosmetic surgeon who botched her nose job.
Joanne also received $300,000 in punitive damages from the cosmetic surgeon who botched her nose job.
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