Arnold Was Employed During the First Six Months of the Year

question 62

Essay

Arnold was employed during the first six months of the year and earned a $86,000 salary.During the next 6 months, he collected $4,800 of unemployment compensation, borrowed $6,000 (using his personal residence as collateral), and withdrew $1,000 from his savings account (including $60, interest).His luck was not all bad, for in December he won $800 in the lottery on a $20 ticket.Because of his dire circumstances, Arnold's parents loaned him $10,000 (interest-free) on July 1 of the current year, when the Federal rate was 8%.Arnold did not repay the loan during the year and used the money for living expenses.Calculate Arnold's adjusted gross income for the year.

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Definitions:

Self-Interest

What is in the best interest of and benefit to an individual.

Social Exchange

A concept describing how social stability and change occur through the process of transactions agreed upon by individuals or groups.

Calculated Involvements

Engagements or commitments that are made after careful consideration and planning to achieve specific outcomes.

McGregor's Theory Y

A management theory proposing that employees are inherently motivated and can exercise self-direction and control when committed to organizational objectives.