Ralph and Josee Have Adjusted Gross Income of $53,000

question 8

Multiple Choice

Ralph and Josee have adjusted gross income of $53,000.They have itemized deductions of $18,000 and incurred $2,000 in college expenses for their daughter who is a freshman at a local community college.They file jointly and have three exemptions at $3,200 each.Compute their tax liability for the current year.

• A)$1,580
• B)$2,450
• C)$2,555
• D)$2,780

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Definitions:

Straight-Line Depreciation

Straight-line depreciation is a method of allocating the cost of a fixed asset evenly over its useful life, assuming a constant rate of depreciation each year.

Journal Entry

A record in accounting that notes every transaction, detailing the accounts affected and the amounts charged or credited.

Equipment Disposal

The process of getting rid of fixed assets such as machinery or equipment, typically due to obsolescence, replacement, or sale.

Acquisition Costs

The total costs incurred to acquire an asset, including the purchase price and all related expenses.