Answered: (D) $1,024.33

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Vlad has an annual salary of $90,000. He contributes 35% of his pre-tax income to his mortgage and 401(k), and he pays $400 per month for car and health insurance (pre-tax, deducted after mortgage and 401(k)). All taxes are calculated based on Casey’s adjusted gross income (pay remaining after mortgage, 401(k), and insurance payments). He must pay: 5% tax on the first $8,000 in income, 20% tax on any income between $8,001 and $40,000, 30% tax on income between $40,001 and $100,000, and a 6% tax on his total adjusted gross income. What is Vlad’s approximate weekly take-home pay after all deductions have been made?

(A) $428.50

(B) $632.11

(D) $1,024.33

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