Steve's pre-tax annual income is $90,000 and he has a 48.5% marginal tax-rate. He made CPPcontributions seven years ago and eight years ago. He did not make any contributions six years agoor five years ago because he was attending college full-time. He has made CPP contributions in eachof the last four years.Steve currently has individual disability income insurance with the Limbs Assurance Company andpays the premium himself from after-tax income. He did not join his employer's group plan becausehe felt it did not provide adequate coverage. Steve's disability contract is guaranteed renewable. Itspecifies a monthly benefit for total disability of $4,500 and provides coverage for partial disability.He finds the monthly premiums on his contrict very high and is considering purchasing lessexpensive coverage with another company. The contract he is considering purchasing from Head OnAssurance is renewable.Steve also has a participating whole life insurance policy, which he purchased in 2016 with a deathbenefit of $100,000. To date, he has paid $22,000 in premiums and received $5,000 in dividends.The accumulated net cost of pure insurance since he purchased the policy is $7,000. The cashsurrender value is $25,000. He wants to cancel the policy in favour of purchasing a term insurancepolicy for $200,000.When Kathryn's father died, she received a $150,000 death benefit from his life insurance. Shepurchased a variable annuity, which will generate an income for the next 15 years based upon theperformance of a segregated fund. For the first year of the annuity contract, the insurance companyanticipated a rate of interest of 6% compounded monthly with payments made at the start of eachmonth.Steve is concerned that Mile High does not adhere to safety regulations, which puts workers injeopardy. Just last week, a beam that he was moving into position with his crane fell to the ground,narrowly missing two workers. An investigation revealed that the beam had been incorrectly loaded.In response to orders from management to cut the cost of wages, the foreman had assigned thetask of loading the beam to an inexperienced apprentice without the supervision of a moreexperienced worker.If Steve were too badly injured to work as a mobile crane operator, he assumes that he can work inthe office of his father's company earning $4,000 in pre-tax income per month after he is injured.How much would he receive for residual disability in after-tax benefits each month from hisdisability income insurance contract?a) $0b) $2,100c) $500d) $3,150

Insurance is an agreement between two parties in which the insurance company promises to make the…

Answered: If Steve were too badly injured to work…

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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In 2020, Amanda and Jaxon Stuart have a daughter who is 1 year old. The Stuarts are full-time students and they are both 23 years old. Their only sources of income are gains from stock they held for three years before selling and wages from part-time jobs.What is their earned income credit in the following alternative scenarios if they file jointly? Use Exhibit 8-10. (Leave no answer blank. Enter zero if applicable.) a. Their AGI is $15,000, consisting of $5,000 of capital gains and $10,000 of wages.
Julie Whiteweiler made $930 this week. Only social security (fully taxable) and federal income taxes attach to her pay. Whiteweiler contributes $100 each week to her company's 401(k) plan and has $30 put into her health savings account (nonqualified) each week. Her employer matches this $30 each week. Determine Whiteweiler's take-home pay if she is head of household. Enter deductions beginning with a minus sign (-). Round your calculations and final answers to the nearest cent. As we go to press, the federal income tax rates for 2021 are being determined by budget talks in Washington and not available for publication. For this edition, the 2020 federal income tax tables for Manual Systems with Forms W-4 from 2020 or later with Standard Withholding and 2020 FICA rates have been used. Click here to access the Wage-Bracket Method Tables. Gross pay $930 HSA contributions -30 401(k) deductions -100 OASDI tax -57.66 HI tax -13.49 FIT Net pay $
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