Mr and Mrs Compute Their Adjusted Gross Income (AGI) and Taxable Income

question 42

Multiple Choice

Mr. and Mrs. Liddy, ages 39 and 41, file a joint return and have no dependents for the year. Here is their relevant information. $$\begin{array} { l r } \text { Salaries } & \$ 47,000 \\\text { Taxable interest incone } & 5,000 \\\text { Above-the-line deductions } & 1,800 \\\text { Iterrized deductions } & \mathbf { 3 , 2 0 0 }\end{array}$$ Compute their adjusted gross income (AGI) and taxable income.

• A) AGI $50,200; taxable income $29,500
• B) AGI $52,000; taxable income $31,300
• C) AGI $52,000; taxable income $29,500
• D) AGI $50,200; taxable income $40,300

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Definitions:

Optimal Initial Cash Balance

The ideal amount of cash that a company should hold at the start of a period to efficiently meet its operational needs and investment opportunities, while minimizing holding and shortage costs.

Transferring Funds

Transferring funds involves moving money from one account to another, either within the same financial institution or across different institutions.

Optimal Initial Cash Balance

The ideal amount of money a business should hold at the start to minimize costs while avoiding liquidity issues.

Cash Outflow

The movement of money out of a business or financial account, typically as payment for expenses, assets, or liabilities.