9. (CPA) R, age 22, is a full time student at XX College and a candidate for a b
ID: 2417264 • Letter: 9
Question
9. (CPA) R, age 22, is a full time student at XX College and a candidate for a bachelor’s degree. His tuition and fees are $4,000 per year. During the current year, he received the following payments:
State scholarship for 10 months $ 3,600
Loan from the college financial aid office 1,500
Cash support from his parents 3,000
Cash dividends on investments 700
Cash prize awarded at his high school reunion 500
What is R’s gross income for the current year?
a. $1,100 b. 1,200 c. 4,800 d. 9,300
Explanation / Answer
Gross Income includes all the income of an individual regardless of its source.
Thus in the given case,
Gross Income = Scholarship for 10 months($3600) +
Loan from the college financial aid office($1500) +
Cash support from parents($3000) +
Cash dividends on investments($700) +
Cash prize awarded at high school reunion($500)
= $ 9300
Thus Option D is the answer.
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