Louise Marsh is a student at State University. Recently, she purchased a used car for P 50,000 cash. Being concerned about the costs of owning and operating a car, she prepared the following estimates: License fees and taxes-P500 per year Maintenance and repairs - P2,500 Insurance - P2,500 per year Tires - P 2,400 per set of four, the useful life of tires-15,000 km, Cost of petrol - P 0.90 per km. Annual mileage to be driven 10,000 km. Also, Marsh expects to keep the car for three years and sell it for 5,000. She bought a set of new tires for the car during the first week of ownership and does not intend to replace tires at the time of final sale. Required: What is the full cost of a car-km for Marsh's automobile?
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- A Rolls-Royce cost $233,000 when you bought it 4 years ago. Due to the enhancements you have made to the vehicle, it was recently appraised at $255,000. If you sell the car, you will pay a $20,400 luxury tax. Currently, you are leasing your Rolls-Royce for $1,450/month to a limousine company and paying average service fees on the car of $270/month. The car’s annual registration with the Pennsylvania Department of Motor Vehicles costs $3,200. You are deciding whether to sell the Rolls or use it as your full-time family car. What value should you place on your Roll-Royce when analyzing the option of driving the car full time? a. $255,000 b. $234,600 c. $229,680 d. $233,000 e. $0Joe purchased a delivery van for his business through an online auction. His winning bid for the van was $24,500. In addition, Jose incurred the following expenses before using the van: shipping cost of $650; paint to match the other fleet vehicles at a cost of $1,000; registration costs of $3,200. Which included $3,000 of sales tax and an annual registration fee of $200; wash and detailing for $50; and an engine tune-up for $250. What is Jose’s cost basis for the delivery van?Maria is a wedding planner. She purchases a laserjet printer for invitations, save-the-date postcards, etc. The laserjet costs $799 and can be expected to print 200,000 pages. At the end of its useful life, Maria will receive a rebate of $60 when she turns in her old laserjet and purchases a new one. Maria uses the units-of-production method of depreciation.What is the depreciation per unit? If necessary, round to the nearest tenth of a cent.$What is the book value of the laserjet at the end of the first year if 34,000 pages are printed?$In the second year, Maria uses the laserjet to print 56,000 pages. What is the annual depreciation for year 2?$
- Menlyn Mowbray owns a fleet of light delivery vehicles (aka bakkie). One of his delivery vehicles with amarket value of R170 000, and which had originally cost R190 000 on 1 March 2020 was exactly twoyears old at that point in time. (The Small Business Development Corporation had valued it at this dateto determine the value of his assets and liabilities before granting him a loan. As of 1 March 2020, hehas used his light delivery van as follows: 60% for private purposes 40% for business purposes at his trading store Menlyn Mowbray’s costs for in relation to this delivery vehicle incurred during the 2020 year ofassessment were as follows:Fuel and oil 31 200Repairs and maintenance 6 000Licence 720Insurance 600Additional information:The Commissioner has approved a four-year write off period for the light delivery vehicle. Discuss and determine the amounts that resulting from the above transactions that aredeductible in the determination of Menlyn Mowbray’s taxable income?A mechanical engineer purchased a minivan for $47,000. Complete the following table to determin the cost (in dollars) of owning the minivan for the first year of ownership. Assume the minivan has an average fuel efficiency of 28 miles per gallon. (Round your answer to the nearest cent. Assume there are 12 monthly payments.)Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban on July 1, 2022, for $12,000. They expect to use the Suburban for five years and then sell the vehicle for $4,500. The following expenditures related to the vehicle were also made on July 1, 2022:• The company pays $1,800 to GEICO for a one-year insurance policy.• The company spends an extra $3,000 to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides.• An additional $2,000 is spent on a deluxe roof rack and a trailer hitch.The painting, roof rack, and hitch are all expected to increase the future benefits of the vehicle for Great Adventures. In addition, on October 22, 2022, the company pays $400 for basic vehicle maintenance related to changing the oil, replacing the windshield wipers, rotating the tires, and inserting a new air filter.Required:1. Record the expenditures related to the vehicle on July…
- Karl has been hired to install a new air conditioning system in a building. The total cost of the project is $14,000. Karl charges $1,500 for labor plus 1/6 of the cost of the equipment and supplies. If Karl's expenses for the equipment and supplies are $4,000 more than his estimate, how much did the equipment and supplies cost? MmhnmkuuhbjjMr. Jones, the owner of a small service business, decided to give his personal truck to the business permanently. He believes the truck is worth $40,000, although Kelly Blue Book has a fair market value of $25,000. You're the accountant and, Mr. Jones tells you to record the truck on the books for $40,000. Question: Which value will you use and why?Lee, a programmer, earned P350,000 in 2010, but in 2011, he began to manufacture computer monitors. After one year, he submitted the following data to his accountant. • He stopped renting out his cottage for P35,000 a year and used it as his factory. • The market value of the cottage increased from P700,000 to P710,000. • He spent P50,000 on materials, phone, utilities, etc. • He leased machines for P100,000 a year. • He paid P150,000 in wages. • He used P100,000 from his savings account, which pays five 5% interest a year. • He borrowed P400,000 at 10% a year from the bank. • He sold P1,600,000 worth of monitors. • Normal profit is P250,000 a year.
- Lee, a programmer, earned P350,000 in 2010, but in 2011, he began to manufacture computer monitors. After one year, he submitted the following data to his accountant. • He stopped renting out his cottage for P35,000 a year and used it as his factory. • The market value of the cottage increased from P700,000 to P710,000. • He spent P50,000 on materials, phone, utilities, etc. • He leased machines for P100,000 a year. • He paid P150,000 in wages. • He used P100,000 from his savings account, which pays five 5% interest a year. • He borrowed P400,000 at 10% a year from the bank. • He sold P1,600,000 worth of monitors. • Normal profit is P250,000 a year. Compute for the following: * Lee’s explicit costs * Lee’s implicit cost * Lee’s economic profitLee, a programmer, earned P350,000 in 2010, but in 2011, he began to manufacture computer monitors. After one year, he submitted the following data to his accountant. • He stopped renting out his cottage for P35,000 a year and used it as his factory. • The market value of the cottage increased from P700,000 to P710,000. • He spent P50,000 on materials, phone, utilities, etc. • He leased machines for P100,000 a year. • He paid P150,000 in wages. • He used P100,000 from his savings account, which pays five 5% interest a year. • He borrowed P400,000 at 10% a year from the bank. • He sold P1,600,000 worth of monitors. • Normal profit is P250,000 a year. Compute for the following: * Lee’s explicit costsJos is a Sales Manager. He uses his own car to travel to various locations. He acquired the car on 1 October 2021 for $60,000. The acquisition cost was funded entirely by a loan at an interest rate of 15%. He has determined that the depreciation deduction on the car would be $2,300 for the year. In addition, Jos incurred the following expenses during the year: Registration and insurance = $2,000; Repairs and maintenance = $1,000; and Oil and fuel costs = $1,500. For the period 1 October 2021 to 30 June 2022, Jos estimates that the car travelled 15,000 kilometres, 12,000 of which were for business purposes. You may assume that Jos has maintained all necessary records and a logbook. Required: Calculate Jos's deduction for car expenses under the two methods (cent per kilometre rate 0.72 and logbook) in Div 28 of Income Tax Assessment Act 1997. Assume that depreciation has been adjusted for part-year use and the impact of the car limit