2012 AM Essay 1-A Juan Pablo Alonso

Hi Everyone, hope reviewing is going well with all of you. I just joined the forum and it is my first post :).

I don’t understand the answer for this problem.

The reading says “Alonso saves USD 25,000 of his after-tax income every year…Alonso annually provides approximately USD 30,000 of support to local youth sporting leagues…”

In my answer, I listed annual spending as 30,000 and annual saving 25,000, which results in net spending 5,000. Can anyone tell me why the answer did not take the 30,000 into calculation, and why the 25,000 become expense rather than income? The reading did not say the saving of 25,000 was out of the investment income…so I am confused.

I missed this one too. I think saving 25000 is after all expenses, while spending 30000 is included in his annual expense.

I hope the reading on the exam day be more straightforward, after all we can ask the client to clarify for us but not the paper…