Merle Is a Widow, Age 80 and Blind, Who Is

question 146

Multiple Choice

Merle is a widow, age 80 and blind, who is claimed as a dependent by her son.During 2012, she received $4,800 in Social Security benefits, $2,200 in bank interest, and $1,800 in cash dividends from stocks.Merle's taxable income is:

• A)$4,000 - $950 - $2,900 = $150.
• B)$4,000 - $2,900 = $1,100.
• C)$4,000 - $950 - $1,450 = $1,600.
• D)$8,800 - $950 - $2,900 = $4,950.
• E)None of the above.

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Business Owner

An individual who owns and oversees the operation of a company or enterprise.

Equity

The value of an ownership interest in property, including shareholders' equity in a corporation, which represents assets minus liabilities.

Asset

Resources owned by an individual or business that have value and can be used to meet debts, commitments, or legacies.