Hazel, a solvent individual but a recovering alcoholic, embezzled $6,000 from her employer. in the same year that she embezzled the funds, her employer discovered the theft. her employer did not fire her and told her she did not have to repay the $6,000 if she would attend alcoholics anonymous. hazel met the conditions and her employer canceled the debt.
a. hazel did not realize any income because her employer made a gift to her.
b. hazel must include $6,000 in gross income from discharge of indebtedness.
c. hazel must include $6,000 in gross income under the tax benefit rule.
d. hazel may exclude the $6,000 from gross income because the debt never existed.
e. none of these.

Martha is the head of the accounts department in a small manufacturing company. the company follows the accrual-basis method of accounting. it recently purchased raw materials worth $5,000 from its vendors. however, the company paid only $3,000 to its vendors. it plans to pay the remaining amount after three months. considering this information, which entry should martha record in the company’s accounts? a. $5,000 as accounts receivable b. $3,000 as accounts payable c. $2,000 as accounts payable d. $2,000 as accounts receivable

You are the manager of the packaging department in a cookie factory. (obviously, the packaging employees cannot eat the cookies that are transferred in during the period.) after your employees insert cookies into colorful packages (step 1) for display on store shelves, the packages of cookies are then boxed using cardboard cartons (step 2) for shipment to stores. each unit of product is represented by a carton of packaged cookies. the packaging department began the period with 1,000 units of cookies. during the period, 5,000 units of cookies were transferred in from the baking department and 5,500 units of cookies were transferred out to the finished goods department. the number of units of cookies in the ending inventory of the packaging department equals:

Which of the following is an element of inventory holding costs? a. material handling costs b. investment costs c. housing costs d. pilferage, scrap, and obsolescence e. all of the above are elements of inventory holding costs.