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 $10,000 (normal sales price, $14,000; Shine Company's gross profit percentage is 40%).
b. Nikki receives a 25% discount on jewelry restoration services offered by Shine Company. This year, Nikki had Shine Company repair a set of antique ear rings (normal repair cost $500; discounted price $375).