TCO 3) James, a cash basis taxpayer, received the following compensation and fringe benefits in 20x2.

Salary

$72,000

Advance on 20x3 salary

6,000

Disability income protection

3,000

Long-term care insurance premiums

4,000

The employer made the salary advance so that James could pay his son's college tuition that was due in December 20x2.

The wage continuation insurance is available to all employees and pays the employee three fourths of the regular salary if the employee is sick or disabled.

The long-term care insurance is available to all employees and pays $150 per day toward a nursing home or similar facility.

What is James's gross income from the above? (Points : 2)

$72,000

$78,000

$79,000

$85,000

None of the above

Question 4.4. (TCO 3) The taxpayer is an appliance dealer and has the following items of inventory on hand at the end of the year.

Item

Cost

Replacement

Cost

Expected Selling Price

20 big-screen TVs

$10,000

$14,000

$18,000

200 DVD players

20,000

16,000

18,000

100 stereo systems

24,000

21,000

35,000

$54,000

$51,000

$71,000

Under the lower-of-cost-or-market inventory method, the ending inventory value is _____. (Points : 2)

$54,000

$52,000

$51,000

$47,000

None of the above

(TCO 7) In the case of an accrual basis taxpayer, an item of income _____. (Points : 2) is not recognized until cash is received from services is never recognized until the services are performed is not recognized if the customer can return the goods is recognized when all the events have occurred to fix the taxpayer's right to receive the income and the amount of the income can be determined with reasonable accuracy None of the above