1. Buford purchased a new automobile in March for $23,000. In April, he receives a $500 rebate check

1. Buford purchased a new automobile in March for $23,000.
In April, he receives a $500 rebate check from the manufacturer. The rebate was
paid to all customers who purchased one of the manufacturerÂ’s automobiles in
March. Should Buford include the $500 rebate in his gross income? Explain.

2. What is a cash equivalent? How does a cash equivalent
affect the reporting of income?