Final answer:
Janine must recognize a total of $6,000 in prepaid income over two years. Jason's maximum potential income would be $14,500 if he works 1,000 hours and includes government assistance. A scenario with Susan shows how earning income can affect government support and total income.
Step-by-step explanation:
The total amount of prepaid income that Janine must recognize over the two years is $6,000. In year 0, she earns $480 for two months of work at $240 per month. This amount needs to be recognized in year 0. For year 1, the remaining balance of her earnings, amounting to $5,520, must be recognized, as the income can only be deferred for one year.
In a separate financial scenario involving hypothetical figures, Jason would receive a maximum income of $14,500 if he works 1,000 hours at a rate of $4.50 per hour, in addition to receiving $10,000 in government assistance.
Another example with Susan, a single mother, illustrates the impact of work incentives posed by government assistance programs. If Susan does not work, she receives $16,000 in benefits. However, for every dollar she earns from working, her government support reduces by the same amount, potentially affecting her willingness to work more hours. It's essential to create a table to see the total earnings, government support, and total income to fully understand the financial implications and incentives.