Chapter 5 Comprehensive Problem 2

Robin and Joshua were married on January I of last year. Robin has a nine-year-old daughter, A lyssa , from her previous marriage. Joshua works as an audit manager at CwP LLC earning a salary of $126,000. Robin is self

employed and runs a food truck selling cronuts. The couple reported the following financial information pertaining to their activities during the current year. What is the couple's gross income?

1. Joshua t:amt:
2. Robin received $8,500 in child support payments from her former husband.
3. The couple received $300 of interest from corporate bonds and $150 of interest from a municipa l bond.
4. The couple bought 50 shares of ABC I nc. stock for

$40 per share on July 2. The stock was worth $47 a share on December 31 . The stock paid a dividend of

$1.00 per share on December 1.

5. Robin 's father passed away on Apri l 14. She inherited cash of $50,000 from her father and his baseball card collection, valued at $2,000. As beneficiary of her father's l ife insurance policy, Robin also received $150,000.
6. Joshua received $600 cash from CwP as a bonus for passing the CPA exam.
7. Joshua was hit and injured by a drunk driver whi le crossing a street at a crosswalk. He was unabl e to work for a month. He received $6,300 from his disabi l ity insurance. CwP paid the disabi l ity premiums for Joshua but they reported the amount of the prem iums each year as compensation to him on his year-end W-2.
8. The drunk driver who hit Joshua in part U) was required to pay his $2,000 medical costs, $1 ,500 for the emotional trauma he suffered from the accident and

$5,000 for punitive damages.

i. Robin is a 10 percent owner of NPM Inc., a Subchapter S corporation. The company reported total ordinary business income for the year of $I 02,000.

Robin acquired the stock two years ago.

J. Robin's food truck business collected $35,000 in revenues. Inaddition, customers owed her $3,000 at year-end for catering orders delivered for December

holiday parties. During the year, Robin spent $5,500 for supplies, $1,500 for utilities, $15,000 for cost of goods sold. and $500 for miscellaneous exnenses. Robin accounts for her business activities using the cash method of accounting.

k. Joshua 's employer pays the couple's annual health insurance premiums of $7,500.