n December 20, 2019, Deb's employer gave her a Tag Heuer Limited Edition Tom Brady watch because Deb met her sales quota for the year. Deb’s employer originally purchased the watch at the beginning of 2019 for $3,000. At the time Deb received the watch from her employer (Dec. 20, 2019), the price of similar watches had increased to $3,750 because everyone thought that Tom Brady was going to lead the Patriots to another Super Bowl victory. By Dec. 31, 2019, the last day of the tax year, Tag Heuer Limited Edition Tom Brady watches were selling on eBay for $2,000 because Tom Brady was blamed for the Patriots loss to the Miami Dolphins in the playoffs. What is the amount of Deb's gross income, if any, from the receipt of the watch?
Tom Brady Original / Purchase cost beginning of 2019 = $3000
Current price of watch on Dec 20, 2019 = $3750
Selling price of Watch on Dec 31, 2019 = $2000
Deb's Gross Loss = $2000 - $3750 = $(1750) [Selling Price - Cost Price]
Note: Historical / sunk cost $3000 should not be considered while valuing the cost. Replacement / Realisable Value $3750 should be considered while calculating Profit or loss.
n December 20, 2019, Deb's employer gave her a Tag Heuer Limited Edition Tom Brady watch...
On December 20, 2019, Deb's employer gave her a Tag Heuer Limited Edition Tom Brady watch because Deb met her sales quota for the year. Deb’s employer originally purchased the watch at the beginning of 2019 for $3,000. At the time Deb received the watch from her employer (Dec. 20, 2019), the price of similar watches had increased to $3,750 because everyone thought that Tom Brady was going to lead the Patriots to another Super Bowl victory. By Dec. 31,...
On December 31, 2018, Deb's employer gave her a Tag Heuer Limited Edition Tom Brady watch because Deb met her sales quota for the year. Deb’s employer originally purchased the watch in 2017 for $3,750.At the time Deb received the watch from her employer (Dec. 31, 2018), the price had decreased to $3,000 because Tag Heuer was having a difficult time selling through their inventory of Tag Heuer Limited Edition Tom Brady watches. In January 2019, Tom Brady again helped...
1. Taxpayer Info: Star Corp. is a calendar-year, accrual-method C corporation that sells inventory. During 2018, Star Corp had gross sales of $300,000,000 and returns of $10,000,000. At the beginning of the year, Star Corp. had $20,000,000 worth of inventory. During the year, Star Corp. purchased $105,000,000 worth of inventory. Star Corp. had end of year inventory worth $25,000,000. What is Star Corp.'s cost of goods sold? 2. Same facts as previous question. What is the amount of Star Corp.'s...