Question

Feel free to add space and rows to any tables or answer spaces that you feel you need Any questions please reach out to me. Good luck. QUESTION I (15 Points) Arwen and Aragom are married. Arwen has a 15-year-old daughter (Galadriel) from her previous marriage The Solo's reported the following financial Information pertaining to their activities during the current year. Use this information to calculate their Gross income for 2019 Arwen borrowed 552.000 from Legolas to purchase a car. Legolas charged her 2 percent inter 51.040) on the loan, which she paid off on December 31, but they would have charged her 52.280 ir interest was calculated at the applicable federal interest rate. Arwen works as an interior designer and carns a salary of $145.000 Arwen received 53,700 of interest from Bilbo corporate bonds and $2.560 of interest from a Balrog municipal bond. Arwen received these bonds prior to her marriage to Aragor Aragorn owns an upscale barber shop The shop collected $65.000 in revenues. During the year, he spent $6.500 for supplies. $9.500 for utilities, $25,000 for rent, and $3,800 for miscellaneous expenses. One customer gave him use of his vacation home for a week-end (worth $3,900) in exchange for barber services for the year. Aragom accounts for his business activities using the cash method of accounting Arwen received $8,000 in alimony and $4,500 in child support payments from her former husband. They were divorced in 2013. Aragorn's father passed away on April 14. He inherited cash of $70,000 and a coin collection, valued at $9.000. As beneficiary of his father's life insurance policy, Aragorn also received $550,000. The couple bought 900 shares of Hobbit Inc. stock for $20 per share on July 2. The stock was worth $32 a share on December 31. The stock paid a dividend of $3.00 per share on December 1. Arwen received $2,400 cash and a gold watch valued at $385 for reaching 10 years of continuous service at Legolas.

Answer 1

Lom taken cannot be considered Loan and interest as a salary to be considered. , Arwinnorlesin in Income considered should be 3,700 Tax Exemp income Interest from Bilbo corte - Iterst from Municipal band As per below Calculation Arason 24,100 Inlene for barbershor income Areen " Alimony 2 Child Suffort that is is not not tocable faceble income Aragorn txable income is not not acabre Income Inheritar Cash and Coin Collect L'I Polity received 900 helly @$3 2,700 Diviare a shals Arwen Since lift recenter with Strees of so serft Bones. Since not received not to in Current you Gimlinchas reported businey Inlove. not tol Arwen Howl Payment by Enllager is tonose on Tarable inlone - raffle drawin E1,50 3,210 200, E16

Income from Barber Shop Revenue Ads & for use of Vacation home 65.000 3,900 68,900 Lesss Suppies boo chilities esoco pent & His cellaneous Engens 3,800 44,800 &4, 100