Answer:
Calculate the tax consequence of withdrawal from retirement account.
T and L are 40 years old and decide to withdraw $2,100 from their IRA. They lie in a 35% marginal tax bracket.
Analysis
They are withdrawing some amount from their retirement fund. They have to pay the tax and penalty for early withdrawals from the retirement fund. The withdrawal amount is $2,100 so they have to pay tax on it. The tax rate will be 35% which is their marginal tax bracket.
Calculation of tax consequences if withdrawal amount is $2,100:
Ordinary income tax amount calculates by multiplying the withdrawal amount with the ordinary tax rate.
= $2100 × 35%
= $735
The withdrawal amount attracts the 10% penalty. So, the penalty amount is calculated as follows: Penalty on withdrawn funds calculates by multiplying the withdrawn funds with the percentage of penalty.
= $2100 × 10%
= $210
(NOTE: - T and L have to pay ordinary income tax along with the penalty on their withdrawal because they are withdrawing funds from their IRA before age 59.5.)
Total expenses include the tax amount and penalty charge on withdrawal amount. So, it is calculated as follows:
Total expenses =$735 + $210
Total expenses = $945
Conclusion
Therefore, T and L would incur a tax of $945 on their withdrawal. This $945 is the sum of income tax amount and penalty on withdrawal balance.
Answer
C. The government spending to strengthen the economy
Explanation
The fiscal policy is applied by the government to influence the economy through adjusting revenue and spending levels. The Fiscal policy is applied with the monetary policy to give a direction of the economy and reach the set economic goals. In this case, taxation and money transfers has been applied.
Answer:
1. the prices of existing bonds would rise
Explanation:
General Interest rates and price of a bond are inversely related. The market interest rate also reflects an investors expected rate of return also referred to as yield to maturity i.e YTM.
Mathematically, price of a bond is the present value of it's future stream of coupon payments as well as principal repayments discounted at investors expected rate of return i.e YTM.
So, when market interest rates fall in general, this would lead to a rise in the price of bonds as general interest rates represent yield to maturity.
Answer:
cafeteria-style benefits plan
Explanation:
Based on the information provided within the question it seems that Drew was taken aback by the cafeteria-style benefits plan. This is a benefits plan offered by many company's that allows the employee to choose from a variety of different benefit offerings to create their own personalized benefits package that best supports their needs. Such options may include health, dental, eye, and life insurance choices as is the case in this scenario.
The adjusting entry is shown below:
Salaries expense A/c $6,600
To Salaries payable A/c $6,600
(Being salary is adjusted)
The salaries expense is computed by
= Total salary each day × number of days
= $2,200 × 3 days
= $6,600
The 3 days is computed from Monday to Wednesday
And for correct posting, we debited the salaries expense account and credited the salaries payable account.
<h3>What is Salary Payable and Salary Expense?</h3>
Salaries expense is how much an employee earned in salary. Salaries payable refers only to the amount of salary pay that employers have not yet distributed to employees.
Since Salaries are an expense, the Salary Expense is debited.
Correspondingly, Salaries Payable are a Liability and is credited on the books of the company.
Learn more about Salary Payable and Expenses on:
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