Lance Is a Single Father with 1 Child

question 23

Multiple Choice

Lance is a single father with 1 child. He can work as a bagger at the local grocery store for $6 per hour up to 1,200 hours per year. He is eligible for welfare, and if he does not earn any income, he will receive $15,000 a year. If Lance works, the government policy is to deduct 60 cents from his welfare stipend for every $1 that he earns in income. When Lance works 1,200 hours, he receives _______ in government support and his total income is _______.

• A) $10,680, $15,000
• B) $7,800, $15,000
• C) $10,680, $17,880
• D) $7,800, $17,880

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Definitions:

Deposit Method

An accounting practice where revenue from a sale is not recognized until certain conditions are met, typically until all obligations regarding the sale are completed.

Deposit from Purchaser

An amount of money paid by a buyer to a seller to indicate the intention to complete the purchase transaction and secure the item or property being sold.

Balance Sheet

A consolidated financial record that captures the essence of a company's assets, owed sums, and equity of its shareholders at an established point in time.

Gross Profit

The difference between sales revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.