Question

As Mitch was walking home from college to his dorm room, he was suddenly confronted by three thugs on bikes, Alvin, Simon and Theodore. The thugs wanted to steal Mitch's backpack but in the ensuing altercation, Mitch was not only able to keep his backpack but stole all three bikes from Alvin, Simon and Theodore who ran off on foot never to be seen again on campus. Mitch went straight home and looked up the values of the bikes on eBay. Since he did not know how to actually ride a bike, he figured keeping them would be silly, and who needs three bikes anyway? So, after finding the value of each bike was $500, he sold one to his ex-girlfriend for $300, donated one to a charitable organization that assists victims of theft, and sold the other one for its parts for a total sale of $100. How much ordinary gross income will Mitch have as a result of these transactions?

$600

$800

$1,500

$400

Answer 1