Leigh sued an overzealous bill collector and received the following settlement: Damage to her automobile that the collector attempted to repossess Physical damage to her arm caused by the collector Loss of income while her arm was healing Punitive damages $3,300 $15,000 $6,000 $80,000 a. Regarding Leigh's settlement, classify the following as either "Included in" or "Excluded from" her gross income. Included in/Excluded from Income • Damage to her automobile that the collector attempted to repossess • Physical damage to her arm caused by the collector • Loss of income while her arm was healing • Punitive damages b. Assume that Leigh also collected $25,000 of damages for slander to her personal reputation caused by the bill collector misrepresenting the facts to Leigh's employer and other creditors. Is this $25,000 included in Leigh's gross income?
Leigh sued an overzealous bill collector and received the following settlement: Damage to her automobile that the collector attempted to repossess Physical damage to her arm caused by the collector Loss of income while her arm was healing Punitive damages $3,300 $15,000 $6,000 $80,000 a. Regarding Leigh's settlement, classify the following as either "Included in" or "Excluded from" her gross income. Included in/Excluded from Income • Damage to her automobile that the collector attempted to repossess • Physical damage to her arm caused by the collector • Loss of income while her arm was healing • Punitive damages b. Assume that Leigh also collected $25,000 of damages for slander to her personal reputation caused by the bill collector misrepresenting the facts to Leigh's employer and other creditors. Is this $25,000 included in Leigh's gross income?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Problem 5-36 (LO. 2)
Leigh sued an overzealous bill collector and received the following settlement:
Damage to her automobile that the collector attempted to repossess
Physical damage to her arm caused by the collector
Loss of income while her arm was healing
Punitive damages
$3,300
$15,000
$6,000
$80,000
a. Regarding Leigh's settlement, classify the following as either "Included in" or "Excluded from" her gross income.
Included in/Excluded from
Income
Damage to her automobile that the collector attempted to repossess
• Physical damage to her arm caused by the collector
• Loss of income while her arm was healing
• Punitive damages
b. Assume that Leigh also collected $25,000 of damages for slander to her personal reputation caused by the bill collector misrepresenting
the facts to Leigh's employer and other creditors. Is this $25,000 included in Leigh's gross income?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fae87209a-f9cd-475f-8aa8-c06a05f8b9a0%2Fac206a4e-512d-4914-96a1-e28d1a07d2a1%2Fk284fy_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 5-36 (LO. 2)
Leigh sued an overzealous bill collector and received the following settlement:
Damage to her automobile that the collector attempted to repossess
Physical damage to her arm caused by the collector
Loss of income while her arm was healing
Punitive damages
$3,300
$15,000
$6,000
$80,000
a. Regarding Leigh's settlement, classify the following as either "Included in" or "Excluded from" her gross income.
Included in/Excluded from
Income
Damage to her automobile that the collector attempted to repossess
• Physical damage to her arm caused by the collector
• Loss of income while her arm was healing
• Punitive damages
b. Assume that Leigh also collected $25,000 of damages for slander to her personal reputation caused by the bill collector misrepresenting
the facts to Leigh's employer and other creditors. Is this $25,000 included in Leigh's gross income?
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