Mr and Mrs Mr and Mrs

question 2

Multiple Choice

Mr. and Mrs. Gere, who are filing a joint return, have adjusted gross income of $50,000. During the tax year, they paid the following medical expenses for themselves and for Mrs. Gere's mother, Mrs. Williams. The Gere's could claim Mrs. Williams as their dependent, but she has too much gross income. $$\begin{array} { | l | r | } \hline \text { insulin for Mr. Gere } & \$ 1,000 \\\hline \text { Health insurance premiums for Mr. and Mrs. Gere } & \$ 3,100 \\\hline \text { Hospital bill for Mrs. Williams } & \$ 5,200 \\\hline \text { Doctor bill for Mrs. Gere } & \$ 4,000 \\\hline\end{array}$$ Mr. and Mrs. Gere (both age 40) received no reimbursement for the above expenditures. What is the amount of their deductible itemized medical expenses?

• A) $5,200
• B) $8,300
• C) $4,300
• D) $13,300

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Definitions:

External Financing Needed

The amount of funding that a company must seek from external sources to finance its planned activities or investments, beyond what it can generate internally.

Capital Intensity Ratio

A measure of how much capital is used in relation to labor in the production process of a company.

Return on Assets (ROA)

A profitability ratio calculated by dividing net income by total assets, indicating how efficiently a company is using its assets to generate profit.

Percentage of Sales Approach

A method for forecasting financial needs based on the proportion of sales expected in the future.