Final answer:
The correct option is B. $387,000. Sarah's Adjusted Gross Income (AGI) is calculated by summing up her salary, interest income, damages for wrongful termination, punitive damages from a car accident, and dividends from stock, which leads to a total of $387,000.
Step-by-step explanation:
The question requires the calculation of Sarah's Adjusted Gross Income (AGI). To calculate AGI, all taxable income sources need to be aggregated.
This includes her salary, interest income, and damages for wrongful termination. Punitive damages, in this case from a car accident, are also typically included in gross income. This means we summarize all these income sources to get the total
- Salary: $79,000
- Interest Income: $1,000
- Wrongful termination damages: $100,000
- Punitive damages (car accident): $200,000
- Dividends from stock: $7,000
Adding up these amounts gives us an AGI of $387,000. Hence, the correct option is B. $387,000.