Summary Problem: Ralph,age 44,is an Account Executive for Cobb Advertising,Inc

question 80

Essay

Summary Problem: Ralph,age 44,is an account executive for Cobb Advertising,Inc.Ralph's annual salary is $90,000.Other benefits paid by Cobb Advertising were:
$\begin{array}{lr}\text { Heal th and Accident Insurance Premiums } & \$ 1,500 \\\text { Group-Term Life Insurance Policy ( } \$ 135,000 \text { of coverage) } & 250 \\\text { Payment of Country Club Dues } & 3,660 \\\text { Dues to professional organizations, trade journals } & 550 \\\text { Parking space in downtown gar age } & 3,180\end{array}$
In addition to the benefits above,Cobb Advertising has a qualified pension plan into which employees can contribute (and Cobb matches)up to 5% of their annual salary.Ralph contributes the maximum allowable to the plan.
Ralph has never been able to itemize his allowable personal deductions (i.e.,he always uses the standard deduction).In 2013,Ralph receives a refund of $300 of his 2012 State income taxes and a 2012 Federal tax refund of $400.
Other sources of income:
$\begin{array} { l } \text {Interest credited to savings account }&\$980\\ \text {Value of stock received from Western Power \& Light Company }&\\ \text {(Ralph had the option to take the dividend in cash) }&400\\ \text {Sale of Sea Isl and Adventures Common Stock }&\\ \text {(cost of the stock was \( \$ 2,200 \) ) }&3,500\\\text { Value of land inherited from grandfather } & 80,000 \\\text { Crop-share payments received on inherited land } & 2,820\\\end{array}$

Required: Compute Ralph's 2013 gross income.

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Definitions:

CMO

Chief Marketing Officer, a senior executive responsible for developing and overseeing marketing and advertising strategies.

Product Manager

A professional responsible for the strategy, roadmap, and feature definition for a product or product line.

Surrogate Court

A specialized court that deals with matters related to wills, estates, and guardianships, including the administration of estates and probate of wills.

Canadian Lawyer

A legal professional licensed to practice law in Canada.