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:

Novel Features

Characteristics or aspects of something that are new, original, or unusual.

Uncertainty

The state or quality of being unsure or having doubts.

Agency

An individual's capacity to act independently and make their own free choices, influencing their environment and future.

Pathways

Routes or courses which lead from one place to another, often used metaphorically to describe routes to achieving goals or understanding processes.