Question 1

Solve the problem.
-A taxpayer's property has a fair market value of $96,000. The rate of assessment in the area is 60%. The tax rate is $3.16 per $100 of assessed valuation. Find the property tax.

Accepted Answer

A) $1,820.16 
B) $1,880.83 
C) $1,877.76 
D) $1,850.50

Question 2

Solve the problem.
-A pipe fell off a moving truck into the path of the car behind it. The driver and passenger were each awarded $37,000 by the court and damage to the car was $17,000. The truck driver had 25/50 liability insurance limits and $10,000 property damage limits. Find the amount that the insurance company must pay and the amount that the insured must pay.

Accepted Answer

A) $74,000, $0 
B) $50,000, $74,000 
C) $10,000, $7,000 
D) $60,000, $31,000

Question 3

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

Accepted Answer

The answer of Provide an appropriate response.
-List four sources of...

Question 4

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

Accepted Answer

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

Question 5

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

Accepted Answer

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 6

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: $760,000
Face Value of Policy: $507,000
Amount of Loss: $57,000

Accepted Answer

A) $38,000 
B) $47,531 
C) $57,000 
D) $45,600

Question 7

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.

Accepted Answer

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

Question 8

Solve the problem.
-Custom Dry Cleaners owns a building with a replacement cost of $239,000 which is insured for $162,520 with an 80% coinsurance clause. The building has a fire loss of $10,100. How much will the insurance company pay?

Accepted Answer

A) $10,302 
B) $10,100 
C) $6,868 
D) $8,585

Question 9

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. 
-

Accepted Answer

A) $82,534; $9,849.00 
B) $81,296; $11,866.50 
C) $83,234; $13,485.52 
D) $81,296; $13,138.88

Question 10

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. 
-

Accepted Answer

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 11

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

Accepted Answer

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

Question 12

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

Accepted Answer

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

Question 13

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.

Accepted Answer

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 14

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

Accepted Answer

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

Question 15

Solve the problem.
-Poor visibility caused Vicky Weiner's car to crash into another car. She had 25/50 liability limits, $10,000 property damage limits, and collision coverage with a $300 deductible. Damage to her car was $4,152 and to the other car was $11,800. A lawsuit awarded $22,000 and $35,000 in damages for personal injury to the two persons in the other car. How much will the company pay and how much must Vicky Weiner pay?

Accepted Answer

A) $63,852, $7,300 
B) $63,852, $9,100 
C) $65,652, $9,100 
D) $65,652, $7,300

Question 16

Solve the problem. Use the fire insurance rate table if needed. Rates are for each $100 of insurance. Round to the nearest dollar. 
-SLM Instruments owns a class B building with a replacement cost of $602,000. Contents are valued at $302,000. The area is rated 3. Find the fire insurance annual premium.

Accepted Answer

A) $506 
B) $4,370 
C) $5,063 
D) $5,243

Question 17

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

Accepted Answer

The answer of Provide an appropriate response.
-Describe four factors that...

Question 18

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

Accepted Answer

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

Question 19

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.

Accepted Answer

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

Question 20

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: $340,000
Face Value of Policy: $306,000
Amount of Loss: $2,500

Accepted Answer

A) $2,222 
B) $2,813 
C) $2,500 
D) $2,000

Exam 13: Taxes and Insurance

Solve the problem. -A taxpayer's property has a fair market value of $96,000. The rate of assessment in the area is 60%. The tax rate is $3.16 per $100 of assessed valuation. Find the property tax.

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

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

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

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: $760,000 Face Value of Policy: $507,000 Amount of Loss: $57,000

Solve the problem. -Custom Dry Cleaners owns a building with a replacement cost of $239,000 which is insured for $162,520 with an 80% coinsurance clause. The building has a fire loss of $10,100. How much will the insurance company pay?

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

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

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

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

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

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.

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: $340,000 Face Value of Policy: $306,000 Amount of Loss: $2,500