Jarvie loves to bike. In fact, he has always turned down better-paying jobs to work in bicycle shops where he gets an employee discount. At Jarvie’s current shop, Bad Dog Cycles, each employee is allowed to purchase four bicycles a year at a discount. Bad Dog has an average gross profit percentage on bicycles of 25 percent. During the current year, Jarvie bought the following bikes:   Description Retail Price Cost Employee Price Specialized road bike $ 7,400 $ 5,100 $ 5,920 Rocky Mountain mountain bike   4,200   3,500   3,360 Trek road bike   4,700   4,200   3,290 Yeti mountain bike   4,200   3,120   3,360  What amount is Jarvie required to include in taxable income from these purchases?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Jarvie loves to bike. In fact, he has always turned down better-paying jobs to work in bicycle shops where he gets an employee discount. At Jarvie’s current shop, Bad Dog Cycles, each employee is allowed to purchase four bicycles a year at a discount. Bad Dog has an average gross profit percentage on bicycles of 25 percent. During the current year, Jarvie bought the following bikes:
 

Description Retail Price Cost Employee Price
Specialized road bike $ 7,400 $ 5,100 $ 5,920
Rocky Mountain mountain bike   4,200   3,500   3,360
Trek road bike   4,700   4,200   3,290
Yeti mountain bike   4,200   3,120   3,360

 What amount is Jarvie required to include in taxable income from these purchases?

 
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