Karl works at Moe's grocery. This year Karl was paid $35,000 in salary but he was allowed to purchase his groceries at 20% below Moe's cost. This year Karl spent $2,720 to purchase groceries costing Moe $3,400 and worth $5,100. What amount must Karl include in his gross income?

Multiple Choice

• $37,720.

• $38,400.

• $40,100.

• $37,500.

• $35,680.