Tony,age 15,is Claimed as a Dependent by His Grandmother

question 111

Multiple Choice

Tony,age 15,is claimed as a dependent by his grandmother.During 2011,Tony had interest income from Boeing Corporation bonds of $1,000 and earnings from a part-time job of $700.Tony's taxable income is:

• A) $0.
• B) $1,700 - $700 - $950 = $50.
• C) $1,700 - $1,000 = $700.
• D) $1,700 - $950 = $750.
• E) None of the above.

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Definitions:

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales generated, expressed as a percentage.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment or to compare the efficiency of several different investments.

Residual Income

Earnings that exceed the minimum required return on a company's operating assets, demonstrating the excess of net operating income over its cost of capital.

Net Profit

The real income remaining after deducting operating costs that aren't considered in determining gross profit.