Early in the Year, Marion Was in an Automobile Accident

question 66

Multiple Choice

Early in the year, Marion was in an automobile accident during the course of his employment.As a result of the physical injuries he sustained, he received the following payments during the year: $\begin{array}{lr}\text { Reimbursement of medical expenses Marion paid by a medical }\\\text { insurance policy he purchased } & \$ 10,000 \\\text { Damage settlement to replace his lost salary } & 15,000\end{array}$ ? What is the amount that Marion must include in gross income for the current year?

• A)$25,000.
• B)$15,000.
• C)$12,500.
• D)$10,000.
• E)$0.

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Definitions:

Eliminate

The process of removing or getting rid of something.

Contribution Margin

The amount remaining from sales revenue after all variable costs have been deducted, indicating how much revenue is contributing to covering fixed costs and generating profit.

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The arrangements and adjustments made to machinery to prepare it for a production run.

Skilled Labour

Workers who have specialized training or expertise in a particular field or job.