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 Specialized road bike Rocky Mountain mountain bike Trek road bike Yeti mountain bike Price Cost $ 7,900 $5,370 8,600 7,300 4,300 2,950 5,500 4,030 Employee Price $5,530 6,880 3,010 4,400 Problem 12-48 Part a a. What amount is Jarvie required to include in taxable income from these purchases? Amount to be included 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 Specialized road bike Rocky Mountain mountain bike Trek road bike Yeti mountain bike Retail Price $ 7,900 8,600 4,300 5,500 Cost $5,370 7,300 2,950 4,030 Employee Price $5,530 6,880 3,010 4,400 Problem 12-48 Part b b. What amount of deductions is Bad Dog allowed to claim from these transactions? Amount of deductions