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le 11 octoBIe LUI 1. Beverly died during the current year. At the time of her death, her accrued salary and ommissions totaled $3,000 and

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le 11 octoBIe LUI 1. Beverly died during the current year. At the time of her death, her accrued salary and ommissions totaled $3,000 and were paid to her husband. The employer also paid the husband $35,000 which represented an amount equal to Beverly's salary for the year prior to her death The employer had a policy of making the salary payments to "help out the family in the time of its greatest need." Beverly's spouse collected her interest in the employer's qualified profit sharing plan amounting to $30,000. As beneficiary of his wife's life insurance policy, Beverly's spouse elected to collect the proceeds in installments. In the year of death, he collected $8,000 hich included $1,500 interest income. Which of these items are subject to income tax for Beverly's spouse? 2. George is employed by the Quality Appliance Company. All the full time employees a allowed to purchase appliances at the company's cost plus l no cost, a 1-year service contract on all the goods purchased from the company. George purchased a refrigerator for $500. The company's normal selling price for the refrigerator is $800 George also received a service contract, at no charge, that had a value of $150. During the year George was required to have his refrigerator serviced once. The cost of the call would have been $75 if he had not had the service contract. Is George required to recognize any income from the purchase of the refrigerator, the receipt of the service contract, and the service call? 0%. The employee also is given, at 3. Gull Corporation was undergoing reorganization under the bankruptcy laws. The shareholders who had made loans of $300,000 to the corporation, agreed to accept additional stock with a value of $200,000 instead of repayment on the debt. The Old Line Insurance Company, which had a $400,000 mortgage on the building, agreed to reduce the principal to $250,000. A trade creditor with a receivable of $150,000 from the company agreed to accept $70,000 in full payment for the debt incurred to purchase goods that were still on hand. Finally, the company transferred some equipment with an adjusted basis of $90,000 in satisfaction of a liability for $120,000. Compute the corporation's gross income and other adjustments necessary as a result of the above transactions

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