Question
Determine Bettys adjusted gross income for the year given the following information: Salary: $78,000 Child care credit: $1,000 Personal and Dependency Exemptions: $12,000 Investment interest:
Determine Bettys adjusted gross income for the year given the following information:
Salary: $78,000
Child care credit: $1,000
Personal and Dependency Exemptions: $12,000
Investment interest: $4,000
IRA contribution: $5,500
Municipal bond interest: $500
Federal income taxes withheld: $6,000
Itemized Deductions: $15,300
| a. | $82,500 | |
| b. | $82,000 | |
| c. | $76,500 | |
| d. | $77,000 |
Determine Bettys taxable income for the year given the following information:
Salary: $78,000
Child care credit: $1,000
Personal and Dependency Exemptions: $12,000
Investment interest: $4,000
IRA contribution: $5,500
Municipal bond interest: $500
Federal income taxes withheld: $6,000
Itemized Deductions: $15,300
| a. | $55,200 | |
| b. | $54,700 | |
| c. | $49,700 | |
| d. | $49,200 |
In 2016, Joan is single and a homeowner who incurs property taxes on her home of $2,000, makes charitable contributions of $500, and pays mortgage interest of $6,000. Joans adjusted gross income is $32,000. What is her taxable income?
| a. | $19,450 | |
| b. | $23,500 | |
| c. | $32,000 | |
| d. | $25,700 |
Remember the facts from the last question:
In 2016, Joan is single and a homeowner who incurs property taxes on her home of $2,000, makes charitable contributions of $500, and pays mortgage interest of $6,000. Joans adjusted gross income is $32,000.
Assume the same facts as above, but Joan is not a homeowner, so she has no property tax or mortgage interest. Instead, she pays rent of $800 per month for her apartment. What is her taxable income now?
| a. | $21,900 | |
| b. | $17,850 | |
| c. | $25,700 | |
| d. | $21,650 |
Jesse supports three people, all of whom have gross income of less than $4,050; Tina, an unrelated child who lives with him; his cousin Judy, who lives in another state; and his daughter Vicki, who lives in her own home. Assume all other tests not mentioned are met. How many dependency exemptions, if any, may Jesse claim?
| a. | 0 | |
| b. | 1 | |
| c. | 2 | |
| d. | 3 |
Amy and Chris have three children and are unclear whether they can claim their children as dependents. Assume Amy and Chris provide all the support not provided by the children. Information on the children is as follows:
Peter, age 25, who served in the military immediately after high school, is a full-time college senior. He worked part-time earning $2,200 and provided 20% of his support.
| a. | Peter is a qualifying child dependent because he is in college full-time | |
| b. | Peter is not a dependent because he fails the age test | |
| c. | Peter is a qualifying relative dependent because he meets the qualifying tests | |
| d. | Peter is not a qualifying relative because he fails the gross income test |
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Canadian Cases In Financial Accounting
Authors: Carol E. Dilworth, Joan E. D. Conrod
2nd Edition
256111405, 978-0256111408
