work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question Problem 3-40 (LO 3-2, LO 3-3) (Algo) Manny, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $24,000 of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny's marginal tax rate is 37 percent this year and next year, and that he can earn an after- tax rate of return of 7 percent on his investments. a. What is the after-tax income if Manny sends his client the bill in December? After-tax income b. What is the after-tax income if Manny sends his client the bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) After-tax income 38OF Sunny O C O e