Personal Finance Planning Quiz 2 Chapters 3-4

Mike Hansen has adjusted gross income of $28,000. During the year, Mike decided he needed a larger home. He purchased a home on a golf course in the same town as his first home. Mike incurred $7,500 in moving expenses. How much of this can he deduct from adjusted gross income?

$0

Interest earnings of $1,600 from a taxable investment for a person in a 28 percent tax bracket would result in after-tax earnings of:

$1,152

Jamie McFarland has determined that the value of her liquid assets is $4,500, the value of her real estate is $128,000, the value of her personal possessions is $62,000, and the value of her investment assets is $73,000. She has also determined the value of her current liabilities is $7,500 and the value of her long term liabilities is $98,000. What is the total value of her debts?

$105,500

Katherine Kocher has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1,200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3,300. She has a car worth $12,500. She has recently purchased a 2-year certificate of deposit worth $5,500 and she has a retirement account worth $38,550. What is the value of her liquid assets?

$2,050

Katherine Kocher has determined the following information about her own financial situation. Her checking account is worth $850 and her savings account is worth $1,200. She owns her own home that has a market value of $98,000. She has furniture and appliances worth $12,000 and a home computer and laptop worth $3,300. She has a car worth $12,500. She has recently purchased a 2-year certificate of deposit worth $5,500 and she has a retirement account worth $38,550. What is the value of her personal assets?

$27,800

Haley Thomas has adjusted gross income of $40,000. She paid $3,600 in property taxes during the year. How much of the tax can she deduct from adjusted gross income?

$3,600

A family has a net worth of $156,000 and liabilities of $167,000, what is the amount of their assets?

$323,000

A $2,000 deposit to a tax-deferred retirement account for a person in a 25 percent tax bracket would result in a reduced tax bill of:

$500

Kim Ye is single and earns $40,000 in taxable income. He uses the following tax rate schedule to calculate the taxes he owes. Up to $8,375 - 10% $8,375 - $34,000 - 15% $34,000 - $82,400 - 25% $82,400 - $171,850 - 28% Calculate the dollar amount of estimated taxes that Kim owes.

$6,181.25

When preparing her monthly budget, Marge Kent has a total spending allowance of $4,600. Each month she pays $1,200 in rent, $60 for cable television and Internet service, and $240 for her auto loan. What percentage of her budget goes for these fixed expenses?

33 percent

Which of the following is (are) typically considered to be a personal financial record?

Answer is All of them (5) 1) birth certificate 2) marriage license 3) certificate of deposit 4) social security card 5) all of the answers

Opportunity costs are only associated with money management decisions involving long-term financial security.

False

A person's filing status is affected by marital status and dependents.

True

A state may impose a personal property tax.

True

An office audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return.

True

Karen Price has created a financial statement for herself that lists all of the assets she owns as well as the debts she owes. This would be an example of:

a balance sheet.

Items that you own with a monetary worth are referred to as:

assets.

Which of the following are considered to be personal financial statements?

balance sheet and cash flow statement

Which one of the following presents a summary of income and outflows for a period of time?

cash flow statement

Ben Chase needs to pay off some of his debts over the next few months. Which item on his balance sheet would help him decide what amounts are due in the near future?

current liabilities

Liabilities are amounts representing:

debts.

For January, Bethany DeWeese had cash inflows of $4,200 and cash outflows of $4,750, resulting in a

deficit of $550.

What type of tax is imposed on the value of an individual's property at the time of his or her death?

estate

Which of the following would result in a reduction of taxable income?

exclusions

A decrease in net worth could be the result of:

expenses exceeding income for a month.

Which one of the following should be budgeted first?

fixed expenses

Sean Carter needs to store monthly statements from his bank, his credit card company and from his savings and loan. Where is the most appropriate place for Sean to store this information?

home file cabinet

An exclusion affects a person's taxes by:

reducing the amount of taxable income.

This month, Ken Grossman has cash inflows of $3,100 and cash outflows of $2,950, resulting in a

surplus of $150

Which one of these terms is defined as the use of legitimate methods to reduce one's taxes?

tax avoidance

Mr. and Mrs. Keating want to give their son Dudley a total of $24,000. They each write him a check for $12,000 so they won't have to pay any gift tax. This is an example of:

tax avoidance.

Tax-deferred retirement plans are a type of:

tax shelter

Opportunity costs refer to

trade-offs associated with financial decisions.

If a family planned to spend $370 for food during March but only spent $348, this difference would be referred to as a:

variance.

Which of the following payments would be considered a variable expense?

water bill