Deck 13: Taxes and Insurance

Question 1

Provide an appropriate response.
List four sources of income for which an individual might receive W-2 and 1099 forms.

Answer 1

Answers will vary.

Question 2

Provide an appropriate response.
List four possible tax deductions, and explain the effect that a tax deduction has on taxable income and on income tax due.

Answer 2

Answers will vary.

Question 3

Solve the problem.
Golden Oaks Apartments has a replacement cost of $202,000 and is insured for $121,000. A fire loss is for $14,000. Find the amount of loss paid by the company. Assume an 80% coinsurance clause.

A)$8,400
B)$11,200
C)$14,000
D)$10,483

Answer 3

$10,483

Question 4

Provide an appropriate response.
Give four forms of a tax rate and explain what each form means.

Question 5

Provide an appropriate response.
Explain in your own words multiple carrier insurance. Give two reasons for dividing insurance among multiple carriers.

Question 6

Provide an appropriate response.
Explain in your own words the difference between comprehensive insurance and collision insurance.

Question 7

Find the annual premium in territory 1.
Operator age: 26
Comprehensive/Collision Age Group: 5
Driver's ed: yes
Symbol: 7
Liability: 50/100
Property: $25,000
Uninsured motorist: yes

A)$592.00
B)$917.60
C)$1036.00
D)$526.00

Question 8

Provide an appropriate response.
Define in your own words fair market value and assessed value. How is the assessment rate used when finding the assessed value?

Question 9

Provide an appropriate response.
Describe three factors that determine the premium charged for fire insurance.

Question 10

Find the indicated premium. Round to the nearest cent.
Find the total premium paid over 30 years for a universal life policy with a face value of $35,000. Assume the policy is taken out by a 25-year-old man.

A)$2,709.00
B)$5,313.00
C)$5,365.50
D)$5,040.00

Question 11

Provide an appropriate response.
Describe life insurance premium factors and how they are used.

Question 12

Provide an appropriate response.
Describe the coinsurance clause and how it works.

Question 13

Find the tax rate for the area. Round to the nearest tenth of a percent.
Total tax needed: $321,000 Total assessed value: $53,103,000

A)6.0%
B)0.6%
C)0.8%
D)0.5%

Question 14

Solve the problem.
A taxpayer's property has a fair market value of $110,000. The rate of assessment in the area is 50%. The tax rate is $3.35 per $100 of assessed valuation. Find the property tax.

A)$368,500.00
B)$184,250.00
C)$3,685.00
D)$1,842.50

Question 15

Find the amount to be paid by the insurance company. Assume the policy includes an 80% coinsurance clause. Round to the nearest dollar.
Replacement Cost of Building: $982,000 Face Value of Policy: $589,200
Amount of Loss: $197,000

A)$118,200.00
B)$73,875.00
C)$147,750.00
D)$197,000.00

Question 16

Find the amount paid by each of the multiple carriers.
The Jason Manufacturing Company had an insured fire loss of $79,000. It had insurance coverage as follows: Company A, $450,000; Company B, $275,000; and Company C, $100,000. Find the
Amount paid by each carrier assuming that the coinsurance requirement had been met.

A)$41,893.94, $29,924.24, $7,181.82
B)$45,484.85, $27,530.30, $5,984.85
C)$43,090.91, $26,333.33, $9,575.76
D)$39,500.00, $28,727.27, $10,772.73

Question 17

Find the tax refund or tax due for the following people. The letter following the name indicates the marital status. Assume a 52-week year and that all married people are filing jointly. Use $4050 for each personal deduction, a standard deduction of $6300 for single taxpayers, $12,600 for married taxpayers filing jointly, and $9300 for head of household and the tax rate schedule.

A)$16,646.90 due
B)$335.55 due
C)$335.55 refund
D)$16,646.90 refund

Question 18

Find the property tax. Round to the nearest cent.
Assessed Tax rate valuation :: $82,$7.00400 per $100

A)$1,177.14
B)$576.80
C)$5,768.00
D)$11,771.43

Question 19

Provide an appropriate response.
Describe four factors that determine the premium on an automobile insurance policy.

Question 20

Find the amount paid by each of the multiple carriers.
The Robinson Company had an insured fire loss of $708,000. It had insurance coverage as follows: Company A, $725,000; Company B, $500,000; and Company C, $200,000. Find the amount paid by
Each carrier assuming that the coinsurance requirement had been met.

A)$364,350.88, $252,561.40, $91,087.72
B)$358,140.35, $244,280.70, $105,578.95
C)$362,280.70, $258,771.93, $86,947.37
D)$360,210.53, $248,421.05, $99,368.42

Question 21

Find the tax refund or tax due for the following people. The letter following the name indicates the marital status. Assume a 52-week year and that all married people are filing jointly. Use $4050 for each personal deduction, a standard deduction of $6300 for single taxpayers, $12,600 for married taxpayers filing jointly, and $9300 for head of household and the tax rate schedule.

A)$1,384.17 refund
B)$11,424.23 refund
C)$1,384.17 due
D)$11,424.23 due

Question 22

Find the indicated premium. Round to the nearest cent.
Find the quarterly premium.
Face Value: $40,000
Age of Insured: 30
Sex of Insured: F
Type of Policy: Whole life

A)$226.40
B)$52.62
C)$202.40
D)$58.86

Question 23

Find the adjusted gross income.
Tom and Sandy Bowles had incomes of $19,889 and $8,129. They also had $303 in interest income and an adjustment of $856 in moving expenses.

A)$28,321
B)$27,162
C)$29,177
D)$27,465

Question 24

Find the indicated premium. Round to the nearest cent.
Find the annual premium. Face Value: $45,000
Age of Insured: 50
Sex of Insured: M
Type of Policy: Universal life

A)$1,466.55
B)$965.70
C)$477.90
D)$1,180.35

Question 25

Find the property tax. Round to the nearest cent.

A)$2,359.77
B)$235.98
C)$6,665.50
D)$666.55

Question 26

Solve the problem.
Pelican Lumber Company owns a building with a replacement cost of $738,000 which is insured for $531,360 with an 80% coinsurance clause. The building has a fire loss of $20,500. How much will the insurance company pay?

A)$20,500
B)$18,450
C)$14,760
D)$22,140

Question 27

Solve the problem.
The Corner Cafe has a replacement cost of $232,000 and is insured for $174,000 with an 80% coinsurance clause. The building has a fire loss of $24,500. How much will the insurance company
Pay?

A)$18,375
B)$24,500
C)$27,563
D)$22,969

Question 28

Find the indicated premium. Round to the nearest cent.
Albert Newsom buys a universal life policy with a face value of $60,000. He is 35 years old. Find the quarterly premium.

A)$227.97
B)$40.59
C)$116.22
D)$119.81

Question 29

Find the annual insurance premium.
A person's youthful-operator factor is 2.35. The annual premium for liability coverage is $266.70 for bodily injury and $157.80 for property damage.

A)$1,021.08
B)$999.93
C)$424.50
D)$997.58

Question 30

Find the annual insurance premium.
A person's youthful-operator factor is 2.95. The annual premium for liability coverage is $124.00 for bodily injury and $101.00 for property damage.

A)$663.75
B)$666.70
C)$634.25
D)$225.00

Question 31

Find the tax rate for the area. Round to the nearest tenth of a percent.
Total tax needed: $3,560,000 Total assessed value: $399,700,000

A)11.2%
B)0.1%
C)0.9%
D)112.3%

Question 32

Find the amount paid by each insurance company. Assume that any coinsurance requirement is met.
Insurance loss: $102,000
Company A coverage: $400,000
Company B coverage: $50,000
Company C coverage: $50,000

A)A pays: $81,600
B pays: $10,200
C pays: $10,200
B)A pays: $51,000
B pays: $34,000
C pays: $17,000
C)A pays: $34,000
B pays: $34,000
C pays: $34,000
D)A pays: $102,000
B pays: $0
C pays: $0

Question 33

Find the indicated premium. Round to the nearest cent.
SLM Instruments wants to protect itself in case of the death of its founder and head. It buys a premium term policy on the executive with a face value of $115,000. She is 35 years old. Find the quarterly premium.

A)$117.89
B)$56.51
C)$60.10
D)$19.74

Question 34

Find the total annual premium. Use the fire insurance rate table. Rates are for each $100 of insurance.
Area Rating: 2
Building Classification: C
Building Value: $512,000
Contents Value: $101,600

A)$4,038.40
B)$3,526.80
C)$4,388.64
D)$2,862.80

Question 35

Find the indicated premium. Round to the nearest cent.
Find the semiannual premium.
Face Value: $70,000
Age of Insured: 40
Sex of Insured: M
Type of Policy: 20-pay life

A)$452.32
B)$866.08
C)$1,698.20
D)$771.12

Question 36

Find the annual premium in territory 1.
Operator age: 59 Comprehensive/Collision Age Group: 1
Driver's ed: yes
Symbol: 7
Liability: 100/300
Property: $50,000
Uninsured motorist: yes

A)$674.00
B)$608.00
C)$1179.50
D)$1044.70

Question 37

Find the annual premium in territory 1.
Operator age: 62 Comprehensive/Collision Age Group: 3
Driver's ed: yes
Symbol: 7
Liability: 100/300
Property: $50,000
Uninsured motorist: yes

A)$582.00
B)$745.20
C)$630.00
D)$648.00

Question 38

Find the property tax. Round to the nearest cent.
Assessed Tax rate valuation :: $50,$1.20400 per $100

A)$4,200.00
B)$42,000.00
C)$604.80
D)$60.48

Question 39

Find the amount of taxable income and the tax owed for the following people. The letter following the name indicates the marital status and all married people are filing jointly. Use $4050 for each personal exemption; $6300 as the standard deduction for single taxpayers, $12,600 for married taxpayers filing jointly, and $9300 for head of household and the following tax rate schedule.

A)$64,679; $11,075.25
B)$64,679; $11,312.25
C)$66,179; $11,910.12
D)$64,531; $10,430.25

Question 40

Find the tax rate for the area. Round to the nearest tenth of a percent.
Total tax needed: $948,000
Total assessed value: $148,720,000

A)0.6%
B)0.8%
C)6.00%
D)0.5%

Question 41

Solve the problem.
Mark Stephens owns rental units with a replacement cost of $290,000 which are insured for $188,500 with an 80% coinsurance clause. There is a fire loss of $20,500. How much will the insurance company pay?

A)$13,325
B)$19,988
C)$20,500
D)$16,656

Question 42

Find the amount to be paid by the insurance company. Assume the policy includes an 80% coinsurance clause. Round to the nearest dollar.
Replacement Cost of Building: $367,000
Face Value of Policy: $257,000
Amount of Loss: $2,200

A)$2,200
B)$2,514
C)$1,760
D)$1,926

Question 43

Find the adjusted gross income.
Juan and Amy Marino had incomes of $23,730 and $25,661. They also had $175 in stock dividends and $859 in interest. They both contributed to their Individual Retirement Accounts in amounts of $1,068 and $1,134.

A)$48,223
B)$48,048
C)$50,425
D)$52,627

Question 44

Find the assessed value for the property.
Fair market value: $87,000
Rate of assessment: 80%

A)$696,000
B)$69,600
C)$17,400
D)$34,800

Question 45

Find the indicated premium. Round to the nearest cent.
Find the annual premium.
Face Value: $45,000
Age of Insured: 25
Sex of Insured: F
Type of Policy: Whole life

A)$102.60
B)$116.10
C)$183.15
D)$227.70

Question 46

Solve the problem.
In one county, property is assessed at 45% of market value with a tax rate of 35.8 mills. In a second county, property is assessed at 33% of market value with a tax rate of 42.0 mills. If you had $110,000 to spend on a house, which county would charge the lower property tax? Find the annual amount saved.

A)First county, $2,475.00
B)Second county, $2,475.00
C)Second county, $247.50
D)First county, $247.50

Question 47

Find the property tax. Round to

A)$618.18
B)$187.00
C)$6,181.82
D)$1,870.00

Question 48

Find the annual premium in territory 1.
Operator age: 22
Comprehensive/Collision Age Group: 4
Driver's ed: no
Symbol: 7
Liability: 25/50
Property: $10,000
Uninsured motorist: no

A)$1029.00
B)$1176.00
C)$1445.50
D)$1151.50

Question 49

Find the annual premium in territory 1.
Operator age: 20
Comprehensive/Collision Age Group: 4
Driver's ed: yes
Symbol: 7
Liability: 15/30
Property: $10,000
Uninsured motorist: no

A)$541.00
B)$475.00
C)$1401.25
D)$1116.25

Question 50

Find the indicated premium. Round to the nearest cent.
Find the total premium paid over 30 years for a whole life policy with a face value of $20,000. Assume the policy is taken out by a 25-year-old woman.

A)$3,036.00
B)$3,066.00
C)$2,442.00
D)$2,088.00

Question 51

Solve the problem.
A taxpayer's property has a market value of $117,000. The rate of assessment in the area is 30%. The tax rate is $7.55 per $100 of assessed valuation. Find the property tax.

A)$265,005.00
B)$883,350.00
C)$8,833.50
D)$2,650.05

Question 52

Find the indicated tax rate.

A)$74.30
B)7.43
C)$0.74
D)74.3

Question 53

Find the amount paid by each of the multiple carriers.
The Baker Fur Company had an insured fire loss of $2,364,000. It had insurance coverage as follows: Company A, $2,000,000; Company B, $750,000; and Company C, $325,000. Find the amount paid by each carrier assuming that the coinsurance requirement had been met.

A)$1,537,560.98, $576,585.37, $249,853.66
B)$1,569,593.50, $560,569.11, $233,837.40
C)$1,601,626.02, $528,536.59, $233,837.40
D)$1,441,463.41, $640,650.41, $281,886.18

Question 54

Find the total annual premium. Use the fire insurance rate table. Rates are for each $100 of insurance.
Area Rating: 4
Building Classification: B
Building Value: $291,000
Contents Value: $102,000

A)$2,967.90
B)$2,278.20
C)$3,005.70
D)$296.79

Question 55

Find the tax in the following application problems. Use $4050 for each personal deduction, a standard deduction of $6300 for single taxpayers, $12,600 for married taxpayers filing jointly, $6300 for married taxpayers filing separately, and $9300 for head of household and the tax rate schedule.
Glenn and Natalie Dowling had combined wages and salaries of $69,117, other income of $5,258, dividend income of $317, and interest income of $664. They have adjustments to income of $2,435. Their itemized deductions are $9,180 in mortgage interest, $1,611 in state income tax, $846 in real estate taxes, and $1,193 in charitable contributions. The Dowlings filed a joint return and claimed four exemptions.

A)$4,243.65
B)$8,772.75
C)$6,128.15
D)$5,656.15

Question 56

Find the amount paid by each insurance company. Assume that any coinsurance requirement is met.
Insurance loss: $10,000
Company A coverage: $84,000
Company B coverage: $28,000

A) A pays: $8,400
B pays: $1,600
B) A pays: $7,200
B pays: $2,800
C) A pays: $7,500
B pays: $2,500
D) A pays: $10,000
B pays: $0

Question 57

Find the tax refund or tax due for the following people. The letter following the name indicates the marital status. Assume a 52-week year and that all married people are filing jointly. Use $4050 for each personal deduction, a standard deduction of $6300 for single taxpayers, $12,600 for married taxpayers filing jointly, and $9300 for head of household and the tax rate schedule.

A)$2,662.22 due
B)$685.96 due
C)$2,662.22 refund
D)$685.96 refund

Question 58

Find the tax in the following application problems. Use $4050 for each personal deduction, a standard deduction of $6300 for single taxpayers, $12,600 for married taxpayers filing jointly, $6300 for married taxpayers filing separately, and $9300 for head of household and the tax rate schedule.
Mark Collins had an adjusted gross income of $26,741 last year. He had deductions of $899 for state income tax, $555 for property tax, $2,824 in mortgage interest, and $221 in contributions. Collins claims one exemption and files as a single person.

A)$1,311.15
B)$1,994.90
C)$3,631.30
D)$2,356.30

Question 59

Solve the problem.
A driver injures a bicycle rider. The driver has bodily injury limits of 15/30. In court, the injured rider is awarded damages of $23,000. Find the amount that the insurance company must pay and the amount that the insured must pay.

A)$0, $15,000
B)$30,000, $0
C)$23,000, $0
D)$15,000, $8,000

Question 60

Find the property tax. Round to
Assessed Tax rate valuation :: $167

A)$1,085.40
B)$2,417.91
C)$108,540.00
D)$10,854.00

Question 61

Find the total annual premium. Use the fire insurance rate table. Rates are for each $100 of insurance.
Area Rating: 2
Building Classification: B
Building Value: $878,000
Contents Value: $451,000

A)$6,431.50
B)$6,858.50
C)$643.15
D)$7,447.20

Question 62

Find the indicated premium. Round to the nearest cent.
Susan Meyer buys a premium term policy at age 25. The policy has a face value of $45,000. Find the monthly premium.

A)$18.72
B)$21.29
C)$7.44
D)$6.54

Question 63

Find the adjusted gross income.
Nancy earned $18,575 in salary, $1,084 in unemployment compensation, and $74 in dividends. She contributed $871 to her Individual Retirement Account.

A)$18,862
B)$20,604
C)$19,733
D)$18,788

Question 64

Find the tax in the following application problems. Use $4050 for each personal deduction, a standard deduction of $6300 for single taxpayers, $12,600 for married taxpayers filing jointly, $6300 for married taxpayers filing separately, and $9300 for head of household and the tax rate schedule.
Brian Moss had wages of $80,745, dividends of $374, interest of $684, and adjustments to income of $1,066 last year. He had deductions of $878 for state income tax, $452 for city income tax, $988 for property tax, $7,336 in mortgage interest, and $182 in contributions. He claims three exemptions and files as head of household.

A)$8,362.65
B)$10,051.75
C)$8,985.25
D)$3,387.75

Question 65

Find the amount of taxable income and the tax owed for the following people. The letter following the name indicates the marital status and all married people are filing jointly. Use $4050 for each personal exemption; $6300 as the standard deduction for single taxpayers, $12,600 for married taxpayers filing jointly, and $9300 for head of household and the following tax rate schedule.

A)$23,955; $3,220.75
B)$17,655; $2,184.50
C)$20,268; $2,667.70
D)$22,205; $2,905.75

Question 66

Find the amount to be paid by the insurance company. Assume the policy includes an 80% coinsurance clause. Round to the nearest dollar.
Replacement Cost of Building: $50,000
Face Value of Policy: $30,000
Amount of Loss: $2,800

A)$1,680
B)$2,100
C)$2,240
D)$2,800

Question 67

Solve the problem.
Haverty's Furniture owns a building with a replacement cost of $590,000 which is insured for $371,700 with an 80% coinsurance clause. The building has a fire loss of $20,500. How much will the insurance company pay?

A)$12,915
B)$16,144
C)$20,500
D)$19,373

Question 68

Find the total annual premium. Use the fire insurance rate table. Rates are for each $100 of insurance.
Area Rating: 1
Building Classification: A
Building Value: $182,000
Contents Value: $38,000

A)$57.66
B)$677.40
C)$576.60
D)$713.20

Question 69

Find the assessed value for the property.
Fair market value: $189,000
Rate of assessment: 85%

A)$28,350
B)$160,650
C)$80,325
D)$1,606,500

Question 70

Find the amount of taxable income and the tax owed for the following people. The letter following the name indicates the marital status and all married people are filing jointly. Use $4050 for each personal exemption; $6300 as the standard deduction for single taxpayers, $12,600 for married taxpayers filing jointly, and $9300 for head of household and the following tax rate schedule.

A)$58,125; $9,655.00
B)$59,275; $9,973.75
C)$60,160; $10,070.00
D)$56,275; $8,366.25

Question 71

Find the amount paid by each of the multiple carriers.
The Star Tool Company had an insured fire loss of $1,416,000. It had insurance coverage as follows: Company A, $4,500,000; Company B, $2,500,000; and Company C, $1,000,000. Find the amount paid by each carrier assuming that the coinsurance requirement had been met.

A)$767,000, $413,000, $236,000
B)$796,500, $442,500, $177,000
C)$826,000, $413,000, $177,000
D)$855,500, $354,000, $206,500

Question 72

Find the amount paid by each of the multiple carriers.
The Hamilton Race Track had a fire loss of $207,000. They had insurance as follows: company A, $400,000; company B, $50,000; and company C, $50,000. Find the amount paid by each carrier. Assume the coinsurance requirement is met.

A)A pays: $103,500
B pays: $69,000
C pays: $34,500
B)A pays: $82,800
B pays: $82,800
C pays: $41,400
C)A pays: $165,600
B pays: $20,700
C pays: $20,700
D)A pays: $207,000
B pays: $0
C pays: $0

Question 73

Solve the problem.
A taxpayer's property has a fair market value of $92,000. The rate of assessment in the area is 25%. The tax rate is $6.76 per $100 of assessed valuation. Find the property tax.

A)$621,920.00
B)$155,480.00
C)$1,554.80
D)$6,219.20

Question 74

Find the amount paid by each of the multiple carriers.
The London Coat Company had an insured fire loss of $167,000. It had insurance coverage as follows: Company A, $500,000; Company B, $350,000; and Company C, $150,000. Find the amount paid by each carrier assuming that the coinsurance requirement had been met.

A)$91,850, $54,275, $20,875
B)$87,675, $50,100, $29,225
C)$79,325, $54,275, $33,400
D)$83,500, $58,450, $25,050

Question 75

Find the amount paid by each of the multiple carriers.
A building with a replacement cost of $1,100,000 has fire damages of $360,000. The insurance coverage is split between Company A ($500,000)and Company B ($300,000). Find (a)the amount of the loss covered and (b)amount paid by each company. (Note that the coinsurance requirement has not been met.)

A)(a)$327,272.73$204,545.45
(b)Company A: $204,545.45
Company B: $122,727.27
B)(a $360,000
(b)Company A: $180,000.00
Company B: $180,000.00
C)(a)$327,272.73
(b)Company A: $163,636.36
Company B: $163,636.36
D)(a)$360,000
(b)Company A: $225,000.00
Company B: $135,000.00

Question 76

Find the total annual premium. Use the fire insurance rate table. Rates are for each $100 of insurance.
Area Rating: 3
Building Classification: C
Building Value: $438,000
Contents Value: $149,000

A)$2,306.00
B)$3,951.40
C)$4,442.70
D)$395.14

Question 77

Find the amount of taxable income and the tax owed for the following people. The letter following the name indicates the marital status and all married people are filing jointly. Use $4050 for each personal exemption; $6300 as the standard deduction for single taxpayers, $12,600 for married taxpayers filing jointly, and $9300 for head of household and the following tax rate schedule.

A)$81,285; $15,013.75
B)$89,590; $13,940.00
C)$97,440; $16,610.00
D)$91,640; $15,839.20

Question 78

Find the amount paid by each of the multiple carriers.
The Robins Furniture Company had an insured fire loss of $191,000. It had insurance coverage as follows: Company A, $475,000; Company B, $325,000; and Company C, $175,000. Find the amount paid by each carrier assuming that the coinsurance requirement had been met.

A)$93,051.28, $63,666.67, $34,282.05
B)$85,705.13, $61,217.95, $44,076.92
C)$88,153.85, $58,769.23, $44,076.92
D)$97,948.72, $61,217.95, $31,833.33

Question 79

Find the adjusted gross income.
Curt had income from these sources: $19,794 from his job, $61 in interest, and $248 in dividends. He paid $3,189 in alimony.

A)$20,103
B)$16,914
C)$16,853
D)$23,292

Question 80

Find the tax in the following application problems. Use $4050 for each personal deduction, a standard deduction of $6300 for single taxpayers, $12,600 for married taxpayers filing jointly, $6300 for married taxpayers filing separately, and $9300 for head of household and the tax rate schedule.
Jennifer Binh is single and claims one exemption. Her salary last year was $95,949, and she had other income of $5,852 and interest income of $8,110. She has adjustment to income of $2,218 for an IRA contribution. Her itemized deductions are $4,996 in mortgage interest, $2,376 in state income tax, $1,642 in real estate taxes, and $782 in charitable contributions.

A)$19,674.25
B)$19,313.91
C)$2,967.16
D)$21,111.04