Mary Jane borrowed money from
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:QUESTION 16
Mary Jane borrowed money from the bank to purchase an investment portfolio. During the current year, Mary
Jane paid interest on the bank loan of $250. Mary Jane's investment portfolio earned the following during the
current year:
• Interest income of $500 ($150 of this interest income was reported on a previous year's income tax
return according to the modified accrual approach)
• Actual dividends of $1,200 (assume the applicable dividend gross-up rate is 38%)
Which of the following is the correct amount of net property income to include on Mary Jane's income tax return
for the current year?
$1,550
$2,006
$1,656
$1,756
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