Manny, a calendar$-$year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $$40,000$ of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny's marginal tax rate is $37$ percent this year and next year, and that he can earn an after$-$tax rate of return of $5$ percent on his investments.

Required:

a$.$ What is the after$-$tax income if Manny sends his client the bill in December?

b$.$ What is the after$-$tax income if Manny sends his client the bill in January? Use Exhibit $3\mathrm{.}1.$

Note: Round your answer to the nearest whole dollar amount.

c$.$ Based on requirements a and b$,$ should Manny send his client the bill in December or January?

Complete this question by entering your answers in the tabs below.

Required $A$

Required $B$

Required C

What is the after$-$tax income if Manny sends his client the bill in December?

After$-$tax income