21. Which of the following bonds can be a tax-exempt bond if issued in the current year so that the interest may be excluded from gross income? $1 million of bonds issued by a city with 50% of the proceeds to be private developer to create an industrial neighborhood of offices and warehouses The developer will use the sales and rents to repay 50% of the bond issue. $1 million of bonds issued by a city with 50% ofthe proceeds to be invested in higher-yielding corporate bonds. $1 million of bonds issued by a state with all the proceeds to be used to finance student loans. $1 million of bonds issued by a city with all of the proceeds to be used to help finance a sports stadium owned by a nongovernment company a. by a b. c. d. 22. Basil Company, a cash-basis taxpayer, had the following activity for Year 1 Sales in Year 2, uncollected Sales in Year 2, collected Total sales in Year 2 Collections in Year 1 bad debt $40,000 $1,000,000 $1,040,000 $50,000 What is the correct amount of income to be reported for Year 22 a. $1,040,000 b. $1,000,000 c. $1,050,000 d. $1,090,000 23. John is a cash-basis taxpayer. He received the following items of income in December 2018. The loan on his truck was forgiven because he performed accounting work for the dealer He owed $2,000 at the time. He received a retainer of $500 from a new client to guarantee that his services would be available in February when the client would need help preparing financial statements. He finally received the $800 for work he completed in November of 2017 How much of this income must John include on his 2018 tax return? a. $500 b. $1,300 c. $2,500 d. $3,300