Summary Problem: Ralph,age 44,is an Account Executive for Cobb Advertising,Inc

question 130

Essay

Summary Problem: Ralph,age 44,is an account executive for Cobb Advertising,Inc.Ralph's annual salary is $90,000.Other benefits paid by Cobb Advertising were:
$\begin{array}{lr}\text { Health and Accident Insurance Premiums } & \$ 1,500 \\\text { Group-Term Life Insurance Policy ( } \$ 135,000 \text { of coverage) } & 250 \\\text { Payment of Country Club Dues } & 3,660 \\\text { Dues to professional organizations, trade journals } & 550 \\\text { Parking space in downtown gar age } & 3,180\end{array}$
In addition to the benefits above,Cobb Advertising has a qualified pension plan into which employees can contribute (and Cobb matches)up to 5% of their annual salary.Ralph contributes the maximum allowable to the plan.
Ralph has never been able to itemize his allowable personal deductions (i.e.,he always uses the standard deduction).In 2013,Ralph receives a refund of $300 of his 2012 State income taxes and a 2012 Federal tax refund of $400.
Other sources of income:
$\begin{array}{lr}\text { Interest credited to savings account } & \$ 980 \\\text { Value of stock received from Western Power \& Light Company } & \\\quad \text { (Ralph had the option to take the dividend in cash) } & 400 \\\text { Sale of Sea Island Adventures Common Stock } & \\\quad \text { (cost of the stock was } \$ 2,200) & 3,500 \\\text { Value of land inherited from grandfather } & 80,000 \\\text { Crop-share payments received on inherited land } & 2,820\end{array}$
Required: Compute Ralph's 2013 gross income.

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Definitions:

Complexity

A term that refers to the state or quality of being intricate or complicated, often used to describe systems or problems with multiple interdependent components.

Observability

The degree to which the results or effects of an innovation or product can be seen and understood by others.

Involved Experienced Customer

Refers to consumers who have a high level of engagement and familiarity with a product, service, or brand.

Marketplace

A venue (physical or digital) where buyers and sellers come together to exchange goods, services, or information.