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24 June, 20:39

Herbert was employed for the first six months of 2017 and earned $90,000 in salary. during the next six months, he collected $8,800 of unemployment compensation, borrowed $12,000 (using his personal residence as collateral), and withdrew $2,000 from his savings account (including $60 of interest). he received dividends of $550. his luck was not all bad, for in december, he won $1,500 in the lottery on a $5 ticket. calculate herbert's gross income.

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  1. 25 June, 00:37
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    Answer: Herbert's gross income is $100,910.

    We include Herbert's salary when he was employed, unemployment compensation, dividends and winnings from lottery while calculating gross income.

    We don't include his withdrawal from savings accounts, but we consider the $60 interest he earned on his savings account.

    We also don't include any loans that he's taken in computing gross income.

    So, Herbert's Gross Income will be:

    Salary 90000

    Unemployment benefits + 8800

    Dividends + 550

    Winnings from lottery + 1500

    Interest earned on savings account + 60

    Gross Income (Total) 100910
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