Charlie was hired by Ajax this year as a corporate executive anda member of the board of directors. During the current year, Charlie received the following payments or benefits paid on hisbehalf.

Salary payments $ 123,500
Contributions to qualified pension plan 10,600
Qualified health insurance premiums 10,850
Year-end bonus 21,500
Annual directorâs fee 15,700
Group-term life insurance premiums (face =$40,000) 1,195
Whole life insurance premiums (face = $100,000) 2,130
Disability insurance premiums (no special elections) 5230

1) Charlie uses the cash method and calendar year for taxpurposes. Calculate Charlieâs gross income for the currentyear.

2) Assume that in lieu of a year-end bonus Ajax transferred1,380 shares of Bell stock to Charlie as compensation. Furtherassume that the stock was listed at $29 per share and Charlie wouldsell the shares by year-end, at which time he expected the price tobe $32 per share. Calculate the value of compensation Charlie wouldreport and gain on the sale that would be included in Charlie'sgross income.

a) value of compensation?___

b) Gain on sale?___

3) Suppose that in lieu of a year-end bonus Ajax made Charlieâshouse payments (a total of $27,500). Calculate the value of thehouse payments Charlie would report as income?

$ 27,500 , the actual payment made would be reported by Charlie as income

Explanation:

1) Charlie's Gross Income Calculation

Salary Paid 123,500

Contributions to qualified pension plan      10,600

Qualified health insurance premiums      10,850

Year-end bonus 21,500

Annual director’s fee 15,700

Group-term life insurance premiums (face = $40,000)      1,195 exempt below face value 50,000

Whole life insurance premiums (face = $100,000)      2,130

Disability insurance premiums (no special elections) 5,230

Total Gross Income $ 189,510 excluding 1,195 as specified.

2)

Value of compensation Charlie would report and gain on the sale that would be included in Charlie's gross income.

a) value of compensation 1380 x 29 = $ 40,020

b) Gain on sale 1380 X 3 = $ 4,140

3)

$ 27,500 , the actual payment made would be reported by Charlie as income.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

answer; buying the bill at a discount from the face value to be received at maturity;