The accounting records of Monty Inc. show the following data for 2020 (its first year of operations). 1. Life insurance expense on officers was $8,600. 2. Equipment was acquired in early January for $304,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Monty used a 30% rate to calculate depreciation. 3. Interest revenue on State of New York bonds totaled $3,800. 4. Product warranties were estimated to be $49,900 in 2020. Actual repair and labor costs related to the warranties in 2020 were $9,300. The remainder is estimated to be paid evenly in 2021 and 2022. 5. Gross profit on an accrual basis was $108,000. For tax purposes, $75,900 was recorded on the installment-sales method. 6. Fines incurred for pollution violations were $4,000. 7. Pretax financial income was $793,600. The tax rate is 30%. Prepare a schedule starting with pretax financial income in 2020 and ending with taxable income in 2020.

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.