1. A)

Balance Sheet
Liquid assets	$4,400
Tangible assets	$40,500
Investment assets	$17,100
Short-term liabilities	$3,200
Long-term liabilities	$29,500
Income Statement
Gross income	$23,000
Taxes paid	$3,000
Debt repayment	$3,900
Rent payment	$4,100
All other expenses	$2,500
Total expenses	$13,500

Calculate their debt service to income ratio.

B)

Balance Sheet
Liquid assets	$4,500
Tangible assets	$23,300
Investment assets	$12,600
Short-term liabilities	$3,500
Long-term liabilities	$33,900
Income Statement
Gross income	$25,400
Taxes paid	$3,000
Debt repayment	$2,000
Rent payment	$2,800
All other expenses	$3,600
Total expenses	$11,400

Calculate their Investment Assets to Total Assets ratio.

C)

Ethan has $164,000 in taxable income this year.
Tax Bracket	Bottom of Bracket	Top of Bracket	Tax Liability for Bracket
10%	$0	$12,000	$1,200
16%	$12,000	$47,000	$5,600
19%	$47,000	$117,000	$13,300
22%	$117,000	$217,000	$22,000
27%	$217,000	$417,000	$54,000
32%	$417,000

Calculate their total tax liability for this year.

D)

Keila has $178,000 in taxable income this year.
Tax Bracket	Bottom of Bracket	Top of Bracket	Tax Liability for Bracket
12%	$0	$11,300	$1,356
19%	$11,300	$46,300	$6,650
26%	$46,300	$116,300	$18,200
29%	$116,300	$216,300	$29,000
32%	$216,300	$416,300	$64,000
40%	$416,300

Calculate their total tax liability for this year.

Answer rating: 100% (QA)

Answers and Explanation A To calculate the debt service to income ratio you need to divide the total ... View the full answer