Tom, Dick, and Harry Operate Quality Stores By How Much Will Tom's Adjusted Gross Income Increase Because

question 53

Multiple Choice

Tom, Dick, and Harry operate Quality Stores. Based on advice from Tom's sister, a CPA, the three form a partnership. Tom owns 50%; Dick and Harry each own 25%. For the year, Quality Stores reports the following:
?
$$\begin{array} { l r } \text { Sales revenues } & \$ 800,000 \\\text { Business expenses } & ( 440,000 ) \\\text { Charitable Contributions } & ( 4,000 ) \\\text { Short-term capital gains } & 26,000 \\\text { Long-term capital losses } & ( 14,000 ) \\\text { Taxable income } & \$ 368,000\end{array}$$
By how much will Tom's adjusted gross income increase because of the above?

• A)$178,000
• B)$180,000
• C)$183,000
• D)$184,000
• E)$186,000

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Definitions:

Average Total Cost

The total cost divided by the total quantity produced, representing the cost per unit of output.

Marginal Revenue

The uplift in revenue achieved by marketing an additional unit of a product or service.

Marginal Cost

The cost incurred by producing one additional unit of a product, a key concept in economic decision-making regarding production levels.

Short-Run Supply Curve

A graphical representation that shows the quantity of goods a firm is willing and able to produce and sell at different price levels over a short period, not allowing for all factors of production to vary.