Doug and Pattie Received the Following Interest Income in the Current

question 106

Multiple Choice

Doug and Pattie received the following interest income in the current year: Greenbacks Bank also gave Doug and Pattie a cellular phone (worth $100) for opening the savings account.What amount of interest income should they report on their joint income tax return?

• A)$4,775.
• B)$4,675.
• C)$4,575.
• D)$4,300.
• E)None of the above.

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Definitions:

Operating Income

Income generated from a company's regular business operations, excluding one-time events and expenses.

Variable Cost

Costs that change in proportion to the level of activity or volume of goods produced.

Fixed Costs

Costs that do not change with the volume of production, such as rent, salaries, or insurance.

Contribution Margin

The difference between sales revenue and variable costs of a product or service, used to cover fixed costs and to generate profit.