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In June, Catherine receives stock worth $12,000 as a graduation present from her grandfather. In November, she receives an $800 cash dividend on the stock. Catherine must include the $800 dividend in her gross income but exclude the $12,000 value of the stock received. Which of the construct(s) explain(s) this treatment? I. Capital recovery concept II. All-inclusive income concept III. Constructive receipt doctrine Legislative grace concept IV.

In June, Catherine receives stock worth $12,000 as a graduation present from her grandfather. In November, she receives an $800 cash dividend on the stock. Catherine must include the $800 dividend in her gross income but exclude the $12,000 value of the stock received. Which of the construct(s) explain(s) this treatment? I. Capital recovery concept II. All-inclusive income concept III. Constructive receipt doctrine Legislative grace concept IV.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In June, Catherine receives stock worth $12,000 as a graduation present from her grandfather. In November, she receives an $800 cash dividend on the stock. Catherine must include the $800 dividend in her gross income but exclude the $12,000 value of the stock received. Which of the construct(s) explain(s) this treatment? I. Capital recovery concept All-inclusive income concept II. III. Constructive receipt doctrine Legislative grace concept IV. Statements I and III are correct.
Transcribed Image Text:In June, Catherine receives stock worth $12,000 as a graduation present from her grandfather. In November, she receives an $800 cash dividend on the stock. Catherine must include the $800 dividend in her gross income but exclude the $12,000 value of the stock received. Which of the construct(s) explain(s) this treatment? I. Capital recovery concept All-inclusive income concept II. III. Constructive receipt doctrine Legislative grace concept IV. Statements I and III are correct.
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