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DanielleCPA, Certified Public Accountant (CPA)

Category: Finance

Satisfied Customers: 781

Experience: CPA experienced in tax and financial planning

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XXXXX XXXXX earns $1,200 per week. he is married and claims

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XXXXX XXXXX earns $1,200 per week. he is married and claims four withholding allowances. the FICA rate is as follows: Social Security rate is 6.2% on $97,500; Medicare rate is 1.45%. to date his cumulative wages are $6,000. each paycheck, his employer also deducts $42.50 for health insurance. what is his net pay? (calculate FIT by the percentage method.)

on may 12, bob campbell accepted a $5,000 note in granting a time extension of a bill of goods bought by rick ween. terms of the note were 8% for 120 days. on july 8, bob needed to raise cash and discounted the note at rick's bank at a discount rate of 9%. Calculate bob's proceeds.

XXXXX XXXXX, who lives in territory 5, carries 10/20/5 cumpulsory liability insurance along with optional collision that has a $200 deductible. jim was at fault in an accident that caused $1,800 damage to the other auto and $600 damage to his own. also, the courts awarded $13,000 and $8,000 respectively, to the two passengers in the other car for personal injuries. how much does the insurance company pay, and what is jim's share of responsibility?

jeff sellers bought 200 shares of radio shack stock at $22.35. eight months later, he sold the stock at $31.76. assuming a 2% commission charger, what is the botXXXXX XXXXXne for jeff?

the property of al's garage is worth $300,000. al has a fire insurance policy of $180,000 that contains an 80% coinsurance clause. what will the insurance company pay on a fire that causes $210,000 damage? if al met the coinsurance requirement, how much would the insurance company have to pay?

ray long wants to retire in arizona when he is 70 yrs of age. ray is now 50. he believes he will need $130,000 to retire comfortably. to date, ray has set aside no retirement money. assume ray gets 14% interest compounded semiannually. how much must ray invest today to meet his $130,000 goal?

Hi and welcome to Just Answer! I'm happy to help answer your Finance questions. Feel free to interject at any time if you need clarification.

DMC :

I am going to answer each one of your questions one at a time, so please bear with me, as it will take a little time.

Customer:

thank you

DMC :

XXXXX XXXXX net pay (this assumes 2011 withholding rates as found in IRS Publication 15), that there are no state wages, and that the health insurance is pre-tax.

Gross Pay: $1200 Less Health Ins: (42.50) Taxable Pay: 1157.50 SS Tax: 71.77 (1157.50 *.062) Medicare Tax: 16.78 (1157.50 *.0145) FIT: 91.79 Net Pay: 977.17

FIT calcualted as follows: Taxable less allowances (1157.50 less (71.15*4) = 872.9 (872.9 * .15)-39.15 = 91.79

Customer:

thank you

Customer:

are you working on the other questions, or is somone else

DMC :

No, I am working on them, please be patient.

Customer:

thank you. im sorry i've never done this before.

DMC :

Not a problem.

DMC :

Bob's proceeds: Discount on the note is calculated as follows:

Maturity Value * Discount Rate * Discount Period = Discount

Maturity Value is 5,133.33 calculated as follows: 5,000 * 8% * (120/360)

5,133.33 * 9% * (66/360) = 84.70

Bob’s Proceeds are the Maturity Value less the Discount so 5133.33-84.70=5048.63

Customer:

thank you

DMC :

Total Liability is 1,800 + 600 + 13000 + 8000 which equals 23,400.

However, because the policy will only pay $10,000 per person for personal injuries, the amount the insurance will pay must be reduced by 3,000 or $20,400. The insurance company will pay this amount less Jim’s deductible, so $20,200. Jim is responsible for the rest of the liability, so 3,200.

DMC :

Jeff Sellers and Radioshack Stock:

Cost of shares to purchase: 200 * 22.35 = 4470

Commission on purchase – 4,470 * 2% = 89.40

Cost of shares + commission = Total cost: 4,559.40

DMC :

Sales price of shares = 200 * 31.76 = 6,352

Commission on sale: 6,352 * .02 = 127.04

Proceeds to Jeff: 6,224.96

Jeff’s gain on sale: 6,224.96 – 4559.40 = 1665.56

Customer:

thank yu

Customer:

are you working on the other questions

DMC :

Ray needs to invest $8,681.40 today to have enough for his retirement.

Use the present value of $1 formula, which is 1/(1+r)^n where r is the rate and n is the number of periods.

So your present value factor is 1/(1.07^40), which gives you a factor of .06678.

.06678 * 130,000 = 8681.40

DMC :

And I am getting the answer to the last question now:

DMC :

Still here...

DMC :

A = ([C / R]^{†} * L) Where: A = Amount Payable C = Amount of Coverage Purchased (180,000) R = Property Value * Coinsurance percentage (80% * 300,000) L = Loss (210,000) (180,000)/240,000) * 210,000= 157,700

DMC :

If Al had met the coinsurance requirement, the insurance company would have paid out 210,000, the full amount of the loss.

DMC :

Please be sure to hit the green accept button so I can get credit for helping you out. If you have any follow-up questions, please let me know and I will gladly help you.