Mike Contracted with Kram Company, Mike's Controlled Corporation

question 84

Multiple Choice

Mike contracted with Kram Company, Mike's controlled corporation. Mike was a medical doctor and the contract provided that he would work exclusively for the corporation. No other doctor worked for the corporation. The corporation contracted to perform an operation for Rosa for $8,000. The corporation paid Mike $6,500 to perform the operation under the terms of his employment contract.

• A) Mike's gross income is $6,500.
• B) Mike must recognize the $8,000 gross income because he provided the service.
• C) Mike must recognize $8,000 gross income since the patient obviously wanted him to perform the operation.
• D) The Kram Company corporation's gross income is $1,500.
• E) None of these.

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Definitions:

Consensus

An informational cue indicating the extent to which peers in the same situation behave in a similar fashion.

Sexual Orientation

Refers to an inherent or immutable enduring emotional, romantic, or sexual attraction to other people, classified by the gender(s) of the individuals to whom one is attracted.

Social Status

The position or rank of a person or group within the society based on wealth, occupation, education, family lineage, or other factors.

Diversity

The inclusion of individuals from various backgrounds, cultures, races, genders, etc., enhancing creativity and problem-solving in groups.