Germaine was employed during the first six months of 2021 and earned an $80,000 salary. During the next six months, he collected $7,200 of unemployment compensation. He borrowed $6,000 (using his personal residence as collateral) and withdrew $1,000 from his savings account (on which he had earned $60 interest). Germaine’s parents loaned him $8,000 (interest-free) on July 1 of the current year, when the federal rate was 3%. Germaine did not repay the loan during the year and used the money for living expenses. Please calculate Germaine’s adjusted gross income for the year.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
100%

Germaine was employed during the first six months of 2021 and earned an $80,000 salary.

During the next six months, he collected $7,200 of unemployment compensation.

He borrowed $6,000 (using his personal residence as collateral) and withdrew $1,000 from his savings account (on which he had earned $60 interest).

Germaine’s parents loaned him $8,000 (interest-free) on July 1 of the current year, when the federal rate was 3%.

Germaine did not repay the loan during the year and used the money for living expenses.

Please calculate Germaine’s adjusted gross income for the year.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Computation of Taxable Income
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education