Nikki works for the Shine Company, a retailer of upscale jewelry. How much taxable income does Nikki recognize under the following scenarios?

a. Nikki buys a diamond ring from Shine Company for $10,900 (normal sales price, $15,380; Shine Companys gross profit percentage is 40%).

b. Nikki receives a 30 percent discount on jewelry restoration services offered by Shine Company. This year, Nikki had Shine Company repair a set of antique earrings (normal repair cost $910; discounted price $637.00).