This Year Joseph Joined the Board of Directors The Stock Bonus Consisted of 5,000 Shares of Bell Stock

question 47

Short Answer

This year Joseph joined the board of directors. Besides his director's fees, Joseph received the following employee benefits: $\begin{array}{c}\begin{array}{lll}\text{Salary}\\\text{Contributions to qualified pension plan}\\\text{Qualified health insurance premiums}\\\text{Stock bonus}\\\text{Annual director's fee}\\\text{Group-term life insurance premiums (face = 40,000 )}\\\end{array}\begin{array}{lll}&&\end{array}\begin{array}{r}\$204,000 \\25,000 \\8,000 \\20,000 \\15,000 \\1,800\\\end{array}\end{array}$ The stock bonus consisted of 5,000 shares of Bell stock given to Joseph as compensation. At the time of the transfer the stock was listed at $4 per share. What amounts, if any, should Joseph include in gross income this year?

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Definitions:

Cash Payments Journal

A specialized accounting journal used to record all cash outlays of a business, including expenses, asset purchases, and debt payments.

Purchases Journal

A record of all purchase transactions for inventory, usually on credit, maintained by a business.

Credit Balance

A situation in accounting where the total credits in an account exceed the total debits, commonly seen in liability accounts.

Doubtful Accounts

Doubtful accounts are receivables that a company believes might become uncollectible in the future, leading to their designation as a bad debt expense.