Mike Contracted with Kram Company, Mike's Controlled Corporation

Multiple Choice

Mike contracted with Kram Company, Mike's controlled corporation.Mike was a medical doctor and the contract provided that he would work exclusively for the corporation.No other doctor worked for the corporation.The corporation contracted to perform an operation for Rosa for $8,000.The corporation paid Mike $6,500 to perform the operation under the terms of his employment contract.

A) Mike's gross income is $6,500.
B) Mike must recognize the $8,000 gross income because he provided the service.
C) Mike must recognize $8,000 gross income since the patient obviously wanted him to perform the operation.
D) The Kram Company corporation's gross income is $1,500.
E) None of the above.