1. If the sales tax increases to 12%, what percentage of Jeff's income will Archie now pay in tax on his $150 bill? Show your work.2. Will he make adjustments to his purchases and if yes, how will he adjust? If no, why not?3. Overall, who is impacted the most by the sales tax increase? Why? A3.06.2 Why Do We Pay Taxes Assignment (1) -...OSearchAdrian AshfordAADrawDesignLayoutReferencesMailingsReviewViewHelpMACROECONOMICSPart II: Impact of a Sales Tax IncreaseArchie Windsor is a 19 year old college student at the University of Washington in Seattle. He worksat Royal Foods earning $10.25/hour and his salary is used to purchase mostly goods and servicessuch as food and basic day to day itens. Also, to save money, he does not own a car but relies oncampus transportation and the local area transit system to travel. Most of his food items arepurchased at his job for convenience. Archie estimates 45% of his income is spent on food and basicitems.Jeff Gates is a 60 year old CEO of a major corporation and lives in Medina, Washington. His hourlysalary is roughly estimated to be $4400. He purchases food, basic day to day items as well asvarious luxury goods. Jeff hates shopping so relies on grocery delivery services for most of his foodpurchases. However, he does like to attend local farmers markets and artisanal grocery stores forhis favorite specialty items. He estimates 15% of his income is spent on food and basic items.The current sales tax is 10% for the city of Seattle. This means that each time Archie and Jeffpurchase $150 worth of food and basic items, they must also pay $15 in sales tax.

The sales tax on any sale of goods and services impacts consumer choices by affecting their buying…

Answered: ents to his purchases and if yes, how…

ents to his purchases and if yes, how will he adjust? If no, why not? 3. Overall, who is impacted the most by the sales tax increa

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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