a)
his income must be "x" which is the 100%, and we would know that 0.2% of that is 12.37.

b)
his income must be "x" which is the 100%, and we would know that 2% of that is 12.37.

btw he's not making much either way.
It looks like he used the distributive property. He multiplied 7*2. Then. 7*6. Then he multiplied them together. That is not how you multiply numbers
I think 2401...I just asked Siri