Outlays of monies for items such as life insurance, car insurance, and medical insurance are considered mandatory spending.
What is insurance?Insurance can be defined as the coverage that help to cover cost or expenses in case of unforeseen or unexpected circumstances.
Having an insurance policy is essential as we cannot predict an event that may happen which is why having a life insurance, car insurance as well as medical insurance are classified as a mandatory spending.
Therefore we can conclude that having an insurance coverage is essential.
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which basis of accounting is used for the basic governmental functions of state and local governments? a. cash basis of accounting b. modified accrual basis of accounting c. accrual basis of accounting d. regulatory basis of accounting
Modified accrual basis of accounting is used for the basic governmental functions of state and local governments.
Elaborate on modified accrual basis of accounting.A different bookkeeping technique called modified accrual accounting combines accrual basis accounting and cash basis accounting. With some exceptions, it records expenses when obligations are incurred and recognizes revenues when they are measurable and available. Modified accrual accounting is widely used by governmental organizations.
Transactions are recorded using the cash basis of accounting when money is exchanged. In the same way that expenses are not recorded until after they have been paid, neither is revenue. This implies that future liabilities or anticipated revenue are not recorded in financial accounts until the cash transaction has actually occurred.
As opposed to this, accrual accounting records revenue when a legal obligation is established and recognizes expenses as they are incurred, regardless of the status of the charges.
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An account that earns interest and is matched is _____.
A) an IDA
B) a basic savings account
C) savings account at a credit union
D) a money market
An account that earns interest and is matched is savings at a credit union. A savings account with interest.
What is a savings account?An essential sort of financial instrument is a savings account, which enables you to deposit funds and normally earns a moderate rate of interest. These accounts provide a safe location to keep your money while earning interest and are federally insured up to $250,000 per account owner.
Savings accounts come in a variety of varieties, and they are not all the same. Traditional savings accounts, high-yield savings accounts, money market savings accounts, certificates of deposit, cash management savings accounts, and specialty savings accounts are available.
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In which part of the supply chain do you find the most employee?
One of this system's most crucial components is production. Only when all the other supply chain elements work together harmoniously is it feasible. It is crucial to have good planning, a steady supply of employee commodities, and a well-maintained inventory before the production process can begin.
Directors of the supply chain contribute to the development of the business infrastructures required to ensure the efficiency of the supply chain. To ensure that their business can receive and send its products, leaders in this industry must connect with employee and distributors. The supply chain may become faster, more effective, and more efficient than ever before with great communication.
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State and explain five ways in which tourism aids trade
Five ways that tourism aids trade include:
Increasing foreign reserves. Increasing the number of potential buyers Improving infrastructure which can contribute to trade Marketing local products to foreigners Increase in local trade to service the needs of tourists How does tourism aid trade?Tourism can aid trade by increasing the foreign reserves of a nation. These foreign reserves can then be used to import goods and services. For instance, American tourists to Botswana bring the U.S. dollar which Botswana can use to buy goods from Europe.
Tourism also brings people into a country which means that there are more potential buyers to trade local goods. Tourism also leads to a nation building infrastructure like airports which can then be used to export and import goods. Local products will see more sales as they are marketed to foreigners and companies like hotels will have to buy more goods and services to take care of tourists thereby increasing local trade.
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Suppose that, over time, the price of a good increases while the quantity of the good exchanged on markets also
increases. A possible explanation is that, over time:
A the supply curve shifts inwards.
B the demand curve shifts outwards.
the supply curve shifts outwards
(D) the demand curve shifts inwards.
The most plausible explanation is that there has been an increase in demand if a good's price rises while the amount of the good traded on markets rises.
What will occur if the cost of a good rises?Demand for an alternative to a thing will increase as the price of the good rises and reduce as the price of the good decreases.
If all other parameters remain unchanged, demand will increase, leading to an increase in supply and an increase in the equilibrium price. A decrease in supply and the equilibrium price will follow a decrease in demand.
As income rises, demand for a poor product will decrease. When one product's price reduces and the need for another product declines, the two products are referred to as replacements, yearning for a complementary good; these two goods are said to be complementary.
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If Government expenditures increase by $800B and MPS is equal to 0.05, what will be the increase in real GDP?
In the situation given above, where the government expenditures increase by $800B and the MPS is equal to 0.05, then the increase in the real GDP of the economy will be equal to $4T.
What is the significance of an increase in real GDP?An increase in the real GDP can be referred to or considered as the increase in the quantity of finished products being produced in an economy during a given period, which is also adjusted for the rate of inflation during such period.
When MPS is equal to 0.05, the value of the multiplier will be equal to 5. As a result, the increase in real GDP will be,
Increase in the real GDP = Increase in expenditure*Multiplier
Increase in the real GDP = 800 × 5 = 4T.
Therefore, the significance regarding the increase in the real GDP has been aforementioned.
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You are to enter up the necessary Ledgers for the month of June from the following details, and then balance off the accounts and extract a trial balance as at 30th June 2021 Started firm with capital in cash Kshs. 750,000 Bought goods on credit from F. Kamau Kshs.16200, K. Musioka Kshs. 26100, G. Mutiso. Kshs.7500, M. Kim 22800 and F. Njoroge Kshs. 19200 Sold goods on credit to M. Coke Kshs.12000, T. Big Kshs. 18600 and K. Ngai June 1: June 2: June 4: June 6: June 9: June 10: June 12: June 15: June 18: June 21: June 30: Kshs. 52800 Paid rent by cash Kshs. 3600 M. Coke paid us his account by cheque Kshs. 12900 H. Muigai paid us Kshs. 45000 by cheque We paid the following by cheque G. Mutiso Kshs. 7500, F. Kamau Kshs. 6200 Paid carriage by cash Kshs. 6900 Bought goods on credit form K. Musioka Kshs. 129, M. Kim Kshs. 33000 Sold goods on credit to T. Big Kshs. 20100 Paid rent by cheque Kshs. 5400
Answer: A ledger is the principal book of account where we record all transactions of a business
the Trial balance is used to complete the dual aspect of any transaction and to ascertain the correctness of the ledger postings.
Explanation:
We first of all prepare a cash book to record all the cash transactions
Accounts to Debit:
30/6/2021 Capital 750, 000
M. Coke 12,900
H. Mugai 45,000
Accounts to Credit:
Rent 36,000
R. Mutiso 7500
F. Kamau 6200
Carriage 3600
rent 5400
Balance = 123,900 - 58,700 = Kshs 74,900
next is to prepare the purchases account as follows
F. kamau 16200
K. Musio 26100
G. Mutiso 7500
M. Kim 55,800
F. Noroge 19,200
K. Musaioka 129
Total purchases on credit 124929
Sales ledger Account
M. coke 12000
T. Big 38100
K. Ngal 52800
Total sales on credit 102900
Trial balance as at 30th June, 2021
Credit
Capital 750, 000
M. Coke 12,900 +12000
H. Mugai 45,000
T. big 38,100
K. Ngal 52800
Debit the following accounts
Rent 36,000
R. Mutiso 7500 + 7500
F. Kamau 6200 + 16200
Carriage 3600
rent 5400
K. Musio 26100
M. Kim 55,800
F. Noroge 19,200
K. Musaioka 129
Conclusion: the trial balance has shown various accounts to debit and those accounts to credit
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When a market is monopolistically competitive, the typical firm in the market can earn?
Answer:
Individual companies will no longer be able to sell their products at above-average cost. Companies in monopolistic competition will earn zero economic profit in the long run.
Individual businesses won't be able to continue charging more than average for their goods. Companies engaged in monopolistic competition will ultimately experience no economic profit.
What is monopolistically competitive?Monopolistic competition occurs when numerous companies offer comparable but subpar alternatives to each other's goods or services. The barriers to entry are low in monopolistic competitive industries, and decisions made by one firm do not immediately affect those of its competitors.
A monopoly is a type of imperfect competition in which a producer or seller captures the majority of the market due to the lack of substitutes or competitors. Monopolistic competition, a form of imperfect competition, is when several providers battle it out for the same market share by differentiating their products.
Thus, Individual businesses won't be able to continue charging more than average for their goods.
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Select the correct location on the graph.
Indicate the point where a monopoly will set its price.
Got it right on Edmentum! Hope it helps.
The point where a monopoly will set its price is indicated in the attached image.
What is a monopoly?A corporation has a monopoly when it is the sole manufacturer of a given industry's product with no real competition. A monopoly has complete market power and is able to establish prices above the marginal cost of the company.
The increase in total cost necessary to create an additional unit of the product is known as the marginal cost; the company can achieve positive economic gain by manufacturing more of the commodity and selling it for less.
Since it can satisfy everyone's needs, a producer in a natural monopoly holds influence over the market. When a producer has a government monopoly, commercial production is prohibited and the producer has complete control over the market.
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Due to the pandemic, some states guidelines allow pools to open at 25% capacity. discuss how this restriction will affect operating costs per swim (average cost) and its effect on profitability.
This restriction will negatively affect swimming's operating costs, increasing them in relation to revenue and reducing the clubs' profitability.
What affects a company's operating costs?The average cost of an organization is directly influenced by its activities, that is, its production, products and services. Such expenses correspond to those derived from the organizational routine, such as expenses with infrastructure, transport and the cost of goods or services sold.
Operating costs then correspond to administrative, sales and general expenses that occur for the perfect flow of the company. The average or operating cost of a company is calculated from the average of expenses in relation to the average of acquisition of products or services.
Therefore, in a situation where there is only 25% of the site's capacity used, average costs will increase, while profitability will be reduced as it will not be compensated for by the expenses.
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abc corporation uses an activity-based costing system with three activity cost pools. the company has provided the following data concerning its costs and its activity-based costing system: costs: wages and salaries $ 320,000 depreciation 160,000 utilities 240,000 total $ 720,000 distribution of resource consumption: activity cost pools assembly setting up other total wages and salaries 50% 40% 10% 100% depreciation 10% 55% 35% 100% utilities 15% 50% 35% 100% how much cost, in total, would be allocated in the first-stage allocation to the assembly activity cost pool? group of answer choices $212,000 $176,000 $196,000 $160,000
The first-stage allocation to the assembly activity cost pool$336,000.
How to calculate?
estimating the first-stage allocation of costs to the Setting Up activity cost pool
Adding an amount
salaries and wages $128,000 [$320,000*40%]
Depreciation $88,000 (or $160,000 multiplied by 55%)
Services related to utilities $120,000 [$240,000*50%
Total $336,000
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Dana and his manager have discussed expanding Dana’s role and responsibilities in the company. What written agreement could establish and legally bind the parameters of Dana’s new position?
A. Covenant
B. Business ownership
C. Business incorporation
D. Contract
A written agreement that could establish and legally bind the parameters of Dana’s new position is known as a Contract.
What is an employment contract?In law, an employment contract refers to a type of contract used in labour law to attribute certain rights and responsibilities between the parties to a bargain. Such a contract is normally between the employee and employer.
An employment contract arisen out of the old master-servant law which was used before the 20th century.It relies on the concept of authority in a situation where the employee agrees to accept the authority of the employer and in exchange the employer agrees to pay the employee a stated wage.
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Esteban is the operations manager of a clock manufacturing company. He develops a few quality check procedures that would help the workers identify incorrect
placing of clock faces. After discussing with his team, he decides to incorporate these procedures in the work flow. In this scenario, Esteban follows the total quality
management (TQM) approach by using_?
Esteban employs the total quality management (TQM) approach in this scenario by utilizing poka-yokes.
What exactly is total quality management (TQM)?
Total quality management (TQM) is the continuous process of detecting and reducing or eliminating manufacturing errors, streamlining supply chain management, improving the customer experience, and ensuring that employees are properly trained.
Total quality management seeks to hold all parties involved in the manufacturing process accountable for the overall quality of the final product or service.
What is the Purpose of Total Quality Management?
TQM oversees all activities and tasks required to maintain a desired level of excellence within a business and its operations. This includes establishing a quality policy, developing and implementing quality planning and assurance, as well as quality control and quality improvement measures.
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Identify at least 3 behavioral concerns you think are important to delivering a successful D&I initiative
The 3 behavioral concerns which are important in delivering a successful D&I initiative are, offer meaningful opportunities or employee engagement, communicate clearly and create employee-led task forces, and create mentorship programs.
A D&I initiative is an important way in order to address the current shortcomings of an organization's workforce. Thus, managing a company's diversity and inclusion moments in the global workplace is, in many ways, an unmapped territory.
So, there are certain behavioral concerns which are important in delivering a successful D&I initiative. Diversity and inclusion metrics can be used in order identify risk areas, prioritize initiatives, etc.
Hence, diversity and inclusion initiatives benefits a company.
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2. Using the aggregate expenditure function above, what would be the level of real GDP if the aggregate expenditure function shifted up by $0.2T?
Aggregate expenditure is a macroeconomic instrument used to assess and evaluate a country's total economic activity or total output.
What is expenditure?Given a utility function and the prices of accessible items, the expenditure function in microeconomics gives the smallest amount of money that individual needs to spend to acquire some level of utility.
The expenditure function is related to the indirect utility function in that it specifies the smallest amount of money or income that an individual must spend in order to acquire a certain degree of utility.
Similarly to GDP and national income, aggregate expenditure measures a country's overall spending at a given point in time.
Note that an overview was given as the information is incomplete.
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Which business activity ensures that the business will have goods to sell?
Answer:
inventory maintenance
Explanation:
This ensures there is apt bookkeeping as well as checked stock.
what a type of digital currency in which a record of transactions is maintained, new units of currency are generated by the computational solution of mathematical problems, and it operates independently of a central bank?
A digital currency known as Bitcoin (BTC) keeps track of transactions, creates new units of currency by solving mathematical problems computationally, and is decentralized from a central bank.
What kind of digital currency is that?Digital currency comes in three flavors: cryptocurrencies, stablecoins, and CBDCs. A type of decentralized digital currency that isn't linked to any fiat money is called cryptocurrency. Its ledger systems are managed by cryptography, and the market decides how much it is worth. The first cryptocurrency was bitcoin.
Bitcoin BTC: Is it a wise investment?Incredibly volatile and hazardous, bitcoin. Undoubtedly, it would be a mistake to invest all of your savings in cryptocurrency. When investing in cryptocurrencies, if you're willing to take a chance, make sure you understand what you're doing and have a plan in place.
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there are other things more valuable in an organization besides the people who work there.
Equipment, facilities, and tools are all examples of capital, in addition to valuable human capital. Capital serves as a catalyst to boost organization productivity. A person's knowledge and talents are combined to form human capital, which a business can use to further its objectives.
Employees are an organization's most important asset because of this. Their skills, expertise, and experience are irreplaceable. Therefore, moving forward, firms must emphasise and value the contribution that each individual makes in order to advance. The most valuable asset for valuable business is its people. Any organization's success is primarily due to its workforce. They develop a product from conception to completion and advertise it.
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Sales during the year were 500 units. Beginning inventory was 250 units at a cost of $5 per unit. Purchase 1 was 400 units at $6 per unit. Purchase 2 was 200 units at $7 per unit.
Cost of goods sold under the FIFO cost flow assumption (using a periodic inventory system) was:
$2,300.
$2,750.
$3,200.
$3,650.
Cost of goods sold under the FIFO cost flow assumption (using a periodic inventory system) was $2,750.
Sales during the year = 500 units
Beginning inventory = 250 units at a cost of $5 per unit
Cost of goods sold in beginning inventory = 250 x $5 = $1,250
Because FIFO (First in, first out) method assumes all of the older inventory is sold first,
So, 250 units of Purchase 1 (out of total 400 units) would have been sold.
Cost of goods sold in Purchase 1 = 250 x $6 = $1,500
Total cost of goods sold under the FIFO cost flow assumption (using a periodic inventory system) = $1,250 +$1,500 = $2,750
Companies use the first in, first out (FIFO) method to calculate the cost of goods sold or COGS. The FIFO method assumes that the products which are purchased first by the company are the products which are sold first.
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create a slideshow presentation about the career. Your presentation should include the following:: The name of the career Some information you learned from the video Some information you learned from your own research Education a person needs to get this type of job Skills a person needs to get this type of job How people in this job use technology
pls help
The name of the career is Data Scientist.
A Data Scientist's job is to analyze the data for the actionable insights. So here, they have the specific tasks included which they have to perform, which are - identifying the data-analytics problems which tends to offer the greatest opportunities to the organization. Also, determining the correct data sets and variables.
Data Science is indeed a very good career with tremendous opportunities for major advancement in the future. Thus, it is seen that already, demand is high, the salaries are as well competitive, and the perks are numerous.
Hence, Data Science requires various other skills.
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The manufacturer of the X-15 steel-belted radial truck tire claims that the mean mileage the tire can be driven before the tread wears out is 60,000 miles. Assume the mileage wear follows the normal distribution and the standard deviation of the distribution is 5,000 miles. Crosset Truck Company bought 48 tires and found that the mean mileage for its trucks is 59,500 miles. Crosset would like to know if their experience is different from the manufacturer’s claim.
a. State the null hypothesis and the alternate hypothesis.
b. State whether the decision rule is true or false: Reject H0 if z < −1.96 or z > 1.96 using a 0.05 significance level.
multiple choice 1
True
False
c. Compute the value of the test statistic. (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.)
d. What is your decision regarding H0?
multiple choice 2
Reject H0
Do not reject H0
e. What is the p-value? (Round z value to 2 decimal places and final answer to 4 decimal places.)
f. Is Crosset's experience different from that claimed by the manufacturer at the 0.05 significance level?
multiple choice 3
Yes
No
Using the z-distribution, it is found that:
a. The hypothesis are given as follows:
Null: [tex]H_0: \mu = 60000[/tex].Alternative: [tex]H_1: \mu \neq 60000[/tex].b. The decision rule is True.
c. The test statistic is of z = -0.69.
d. The null hypothesis is not rejected.
e. The p-value of the test is of 0.4902.
f. His experience is not different from that claimed by the manufacturer.
What are the hypothesis tested?At the null hypothesis, it is tested if the mean is of 60,000 miles as claimed, hence:
[tex]H_0: \mu = 60000[/tex].
At the alternative hypothesis, it is tested if the mean is different of 60,000 miles, hence:
[tex]H_1: \mu \neq 60000[/tex].
Decision ruleWe have a two-tailed test, as we are testing if the mean is different of a value, with a significance level of 0.05, meaning that the critical value is of |z| = 1.96, thus the decision rule is:
|z| > 1.96: Reject the null hypothesis.|z| < 1.96: Do not reject the null hypothesis.Test statistic and decisionThe test statistic is given according to the following equation:
[tex]z = \frac{\overline{x} - \mu}{\frac{\sigma}{\sqrt{n}}}[/tex]
In which the parameters are described as follows:
[tex]\overline{x}[/tex] is the sample mean.[tex]\mu[/tex] is the value tested at the null hypothesis.[tex]\sigma[/tex] is the standard deviation of the population.n is the sample size.In the context of this problem, the values of these parameters are as follows:
[tex]\overline{x} = 59500, \mu = 60000, \sigma = 5000, n = 48[/tex]
Hence the test statistic is calculated as follows:
[tex]z = \frac{\overline{x} - \mu}{\frac{\sigma}{\sqrt{n}}}[/tex]
[tex]z = \frac{59500 - 60000}{\frac{5000}{\sqrt{48}}}[/tex]
z = -0.69.
Since the absolute value of the test statistic is less than 1.96, the null hypothesis is not rejected, and his experience is not different from that claimed by the manufacturer.
P-valueUsing a z-distribution calculator, with z = -0.69 and a two-tailed test, the p-value of the test is of 0.4902.
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tammy is a production manager at eagle's nest, inc. she is concerned that too much money is being wasted on inventory that is sitting in the warehouse too long. she should calculate:
Tammy is a production manager at eagle's nest, inc. she is concerned that too much money is being wasted on inventory that is sitting in the warehouse too long. she should calculate: Inventory turnover ratio
What is the inventory turn over?This is the term that is used in business and in logistics to refer to the amount of time that would have to pass from the period that a good is bought by a particular company and the period that the company would finally be able to sell this particular good.
Hence given that the she is thinking about the inventory has been seated in the store for too long, this is the solution to the question.
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The market for milk is initially in equilibrium. milk producers engage in an advertising program to encourage milk drinking, which succeeds in shifting consumer tastes toward drinking milk. more milk producers enter the market. standard demand and supply analysis tells us that:_________
Answer:
The demand for milk will increase and the demand curve will shift to the right.
Explanation:
I took the test
Standard demand and supply analysis tells us that demand for milk will grow and the demand curve will move right.
Who is a consumer?A consumer is someone who purchases a product or uses a service. They pay a certain sum for the product or service. A customer is someone who wants a product that the supplier provides.
The market equilibrium has been attained. As there is an advertising program which is going on with wood help and increasing the demand for the product. And the consumer test as well as advances will also determine this. As well production will help in market demand in supply.
This will make the demand for milk increase. And the demand curve will also shift toward its right. This will mean that the demand and the price will also be affected in the same.
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what professional level security certification requires five years of experience and is designed to focus on an applicant's security-related managerial skills?
The Certified Information Systems Security Professional certification is at the professional level and calls for five years of work experience. It is intended to highlight managerial abilities in security.
What does an information systems security professional with certification do?A secure company environment employing internationally recognized security standards is designed, built, and maintained as part of the CISSP certification. Additionally covering industry best practices, this program will get you ready for the CISSP certification test.
A worldwide accepted benchmark for cyber security experts is the Certified Information System Security Professional (CISSP). The individuals responsible for ensuring network security for your company are the IT security experts.
How valuable is IT's CISSP certification?The CISSP certification is very significant since it gives cyber security professionals the knowledge and expertise they need to use in their professional lives. The extra advantages you receive from having a CISSP certification are unparalleled.
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With public funding, the private space research organization, Expansive Vistas, has begun the process of building a launch site for their new Space Y commercial rocket. They have chosen the North Miami Area as the perfect location for their launch site as Miami meets a few of their needs:
Expansive Vistas's Talking points:
Miami is a tourist destination and Expansive Vistas has plans to move from space research to space tourism, Miami is located on the East coast close to the equator which reduces the amount of fuel needed to propel rockets into space and their is less likelihood of debris damage, and Miami already has the infrastructure needed to build the launch point quickly.
- how would it affect the Miami area residents?
The rocket would affect the Miami area residents because the rocket engines will produce pollution into the atmosphere which can be perceive as a combustion-driven propulsion.
What is the effect of the rocket to the environment?The effect of the rocket to the environment can be varied base on the propellance of it however, Rocket engines do bring about the release of the trace gases into the atmosphere.
And as a result of this it add a negative contribution to ozone layer which bring about the depletion of the layer as a result of the particles of soot that is been generated.
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Which of the following should be considered last when searching for financing? Question 6 options: Family members Banks Commercial finance companies Credit cards
Answer:
Credit cards
Explanation:
One of your classmates would like to open a food delivery service in town. This service would allow people to buy lunch or dinner through an app from a list of restaurants. She’s in the early stages of her analysis and she is asking your advice on possible ways to collect the of data that she can use. What kind of resources would you direct her to? Why?.
Answer:
air
Explanation:
fresh foood to because
1. Why a company choose to develop a business plan?
2. What are the key steps in developing a business plan?
3. What are the common components of a business plan?
1 answer: It will help you steer your business as you start and grow. Think of a business plan as a GPS to get your business going. A good business plan guides you through each stage of starting and managing your business. You'll use your business plan like a GPS for how to structure, run, and grow your new business.
2 answer: Here are six key steps that can lead to an effective plan for your business:
Step 1: Establish your mission. In essence, your mission statement explains why your business exists. ...
Step 2: Analyse your SWOT. ...
Step 3: Develop a plan. ...
Step 4: Create a budget. ...
Step 5: Put it in writing. ...
Step 6: Make it a living document.
3 answer: Main Components of a Business Plan
Executive summary. This is your five-minute elevator pitch. Business description and structure. This is where you explain why you're in business and what you're selling. ...Market research and strategies. Management and personnel. Financial documents.Hope this helps!
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What is the future value of 9,541 invested for 29 years at a 0.02 rate?
Answer:
future value = $9596.50
Explanation:
FV = PV[1 + (i/12)]^12n
Jasmine provided Benjamin, her tax preparer, with detailed check registers to compute her expenses. Benjamin, however, knowingly overstated the expenses on Jasmin's return. After adjustments by the examiner, the tax liability increased significantly Benjamin charged Jasmine $1,000 for the tax preparation. Because Benjamin willfully disregarded information provided in the check registers, Benjamin is subject to a penalty in which amount?
A. $500
B. $750
C. $1,000
D. $5,000
Based on the fact that Benjamin willfully disregarded information by overstating the expenses on Jasmin's return, the penalty that Benjamin would be subject to is D. $5, 000
How to find the penalty to tax preparers?When a tax preparer knowingly overstates or understates expenses, this leads to their client's tax returns being wrongfully stated. This means that tax preparer also willfully disregarded information relevant to the preparation of the tax returns.
When this happens, the Internal Revenue Service prescribes a penalty of either $5, 000 or 75 % of the income the tax preparer makes from the client. The higher amount should be taken.
75 % of the income is:
= 75 % x 1, 000
= $750
This means that the higher amount is $5, 000 so this is the penalty that will be charged to Benjamin for overstating Jasmin's return.
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