Mike Is a Self-Employed TV Technician

question 46

Essay

Mike is a self-employed TV technician.He is usually paid as soon as he completes repairs,but occasionally bills a customer with payment expected within 30 days.At the end of the year he has $2,500 of receivables outstanding.He expects to collect $1,200 of this and write off the remainder.Mike is a cash basis taxpayer and had net earnings from his business (not including the effect of the items above)of $55,000.He also had $3,500 interest income,$200 gambling winnings,and sold corporate stock for $7,000.The stock had been purchased in 2012 for $8,200.Mike is single,has no dependents,and claims the standard deduction.What is his 2016 taxable income? (Ignore the self-employment tax deduction. )

Calculate the present value of perpetuities and annuities given various compounding frequencies.

Determine the necessary initial investment to achieve desired future payments or perpetuities.

Interpret the impact of different interest rates and compounding frequencies on investments and payments.

Analyze the financial feasibility of long-term payment plans and trust funds.

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Definitions:

Crowdsourcing

The method of acquiring necessary services, ideas, or content by requesting contributions from a wide audience, particularly from an online community, as opposed to relying on traditional employees or suppliers.

Decision Making

The process of selecting a course of action from several alternatives to achieve a desired result.

Contemporary Approaches

Modern methods or techniques being used in a particular field or discipline.

Decision Making

Deciding on a particular action from a range of possible actions by using cognitive functions.