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 29 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 $605; discounted price $429.55).

Answer rating: 100% (QA)

a Cost of the ring to Shine Company 15380 x 60 9228 S... View the full answer