Malcolm Figueroa is a sales employee of Carefree Pools and Spas, Incorporated, During 2020, he was issued a company car with a fair market value of $35,000. He drove a total of 22,000 miles; used the car for 2,600 miles for personal use; and his employer paid for fuel, charging Malcolm 5.5 cents per mile. Required: Under the lease-value rule, what is the amount that must be added to Malcolm's gross pay for 2020? (Use the following table for lease values.) (Round your intermediate calculations and final answers to 2 decimal places.) Carefree Pools and Spas, Inc. Worksheet to Calculate Personal Use of Company Vehicle lalua Rule)
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- Amy Lloyd is interested in leasing a new Honda and has contacted three automobile dealers for pricing information. Each dealer offered Amy a closed-end 36-month lease with no down payment due at the time of signing. Each lease includes a monthly charge and a mileage allowance. Additional miles receive a surcharge on a per-mile basis. The monthly lease cost, the mileage allowance, and the cost for additional miles follow: Amy decided to choose the lease option that will minimize her total 36-month cost. The difficulty is that Amy is not sure how many miles she will drive over the next three years. For purposes of this decision, she believes it is reasonable to assume that she will drive 12,000 miles per year, 15,000 miles per year, or 18,000 miles per year. With this assumption Amy estimated her total costs for the three lease options. For example, she figures that the Hepburn Honda lease will cost her 36(299) + 0.15(36,000 36,000) = 10,764 if she drives 12,000 miles per year, 36(299) + 0.15(45,000 36,000) = 12,114 if she drives 15,000 miles per year, or 36(299) + 0.15(54.000 36,000) = 13,464 if she drives 18,000 miles per year. a. What is the decision, and what is the chance event? b. Construct a payoff table for Amys problem. c. If Amy has no idea which of the three mileage assumptions is most appropriate, what is the recommended decision (leasing option) using the optimistic, conservative, and minimax regret approaches? d. Suppose that the probabilities that Amy drives 12,000, 15,000, and 18,000 miles per year are 0.5, 0.4, and 0.1, respectively. What option should Amy choose using the expected value approach? e. Develop a risk profile for the decision selected in part (d). What is the most likely cost, and what is its probability? f. Suppose that, after further consideration, Amy concludes that the probabilities that she will drive 12,000, 15,000, and 18,000 miles per year are 0.3, 0.4, and 0.3, respectively. What decision should Amy make using the expected value approach?Lorene, Inc., owns an apartment complex. The terms of Lorenes lease agreement require new tenants to pay the first and last months rent and a cleaning deposit at the inception of the lease. The cleaning deposit is returned when tenants move out and leave their apartment in good condition. If the apartment is not in good condition, Lorene hires a cleaning company and uses the tenants deposit to pay the cleaning bill, with any excess deposit returned. During the current year, Lorene receives monthly rents totaling 28,000, last months rent deposits from new tenants of 8,000, and cleaning deposits of 7,000. Lorene keeps 5,000 in cleaning deposits to pay the cleaning company bill on apartments that are not left in good shape (the 5,000 is the actual cost that is paid in cash to the cleaning company) and returns 4,000 in deposits. Lorenes expenses related to the rental property (other than the cleaning costs) are 14,000. What is Lorene, Inc.s gross income from the rental property if Lorene is a cash basis taxpayer? an accrual basis taxpayer?Finley is an employee who drives a 2022 Ford C-Max with a fair-market value of $32,000. Finley has been given the choice to have the fringe benefit reported on the W-2 either using the lease-value rule or the cents-per mile rule. The lease value is $8,750, according to Publication 15-b. Finley drove 30,258 miles, 7,552 of it was for personal use. All gasoline was provided by the employer and the amount for personal use was charged back to Alec at $0.0585 per mile. If the car was available for 175 days during the year, what is the prorated annual lease percentage, using the lease-value rule? Note: Round the final answer to two decimal points. A. 47.95%B. 48.61%C. 52.05%D. 69.75%
- You are an employee of a large public company, with an annual salary of $75,000. Last year (2019) your supervisor awarded you a bonus of $19,500. You received the bonus with your February 27, 2020 pay. Traveling is part of your job, and your employer provides you with a leased car. You drove the car a total of 43,360 kilometers and all but 8,240 kilometers were for work. The company pays $560 a month (HST is included in this amount) for your car lease and paid $6,300 in 2020 to maintain the car. You had the car available to you for 11 months because you took your one-month vacation. In compliance with company policy, you parked the car in the company’s garage and gave your supervisor the car keys. You are divorced at the age of 30 and a single parent of two children, one aged 6 and the other aged 8. Your children do not have any income of their own in 2020. In 2018 the divorce court judge decided your former spouse must pay you $36,000 a year for child support, plus $1,000 spousal…On January 1, 2020, Martinez Animation sold a truck to Peete Finance for $44,000 and immediately leased it back. The truck was carried on Martinez’s books at $40,000. The term of the lease is 3 years, there is no bargain purchase option, and title does not transfer to Martinez at lease-end. The lease requires three equal rental payments of $12,500 at the end of each year (first payment on January 1, 2021). The appropriate rate of interest is 4%, the truck has a useful life of 5 years, and the residual value at the end of the lease term is expected to be $14,000, none of which is guaranteed.Prepare Martinez’s 2020 journal entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,265. Record journal entries in the order presented in the problem.)Click here to view factor tables. Date Account…On January 1, 2020, Irwin Animation sold a truck to Peete Finance for $35,000 and immediately leased it back. The truck was carried on Irwin's books at $28,000. The term of the lease is 3 years, there is no bargain purchase option, and title does not transfer to Irwin at lease-end. The lease requires three equal rental payments of $8,696 at the end of each year (first payment on January 1, 2021). The appropriate rate of interest is 6%, the truck has a useful life of 5 years, and the residual value at the end of the lease term is expected to be $14,000, none of which is guaranteed. Prepare Irwin's 2020 journal entries.
- the kerwins are selling their home in order to assist in providing their input for a house they have decided to purchase for $16,000,000. the sale agreement on the house being purchased requires a deposit of 20 percent plus closing costs of $800,000 to be paid on signing on August 31,2018. the balance of the purchase price (second deposit) that is not being financed by mortgage loan is due on September 30,2018, the date on which the sale is to be closed. currently, the kerwins have a mortgage balance of @2,000,000 on their old home, which has appraised at $8,000,000. a purchaser has been identified but the proceeds from the sale of this property will not be received until december 30,2018. the kerwins have been pre-approved by local building society to qualify for a 25-year mortgage of $11,000,000 on the new house. this will attract an interest of 5.50% per annum with monthly compounding. in the mean time rbnc bank ltd, a commercial bank, is offering a bridging loan at a rate of 8.50%…On October 1, 2019, Alharam sold and delivered 3 doors to a builder for $40,000. The builder plans to install it in one of its “Parade of Homes” houses. Alharam accepted a 5-year, zerointerest bearing note with face amount of $53,240. The doors have cost of $25,500. An interest rate of 10% is an appropriate market rate of interest for this customer. What's the entries of this transactionand i wana explain of the entriesIn 2020, Ben purchases and places in service a new auto (not a luxury auto) for his business. The auto costs $57,000 and will be used 60% for business. Assuming the half-year convention applies and Ben elects out of bonus depreciation and Section 179, what will depreciation on the auto be in 2020? $10,100 $57,000 $18,100 $6,060
- The questions below are based on the following information: The cost of the automobile is $20,000 including HST. If the car is leased, the monthly lease payment is $500 including HST. The car is driven for a total of 26,000 km during 2022 and the operating costs for the year are $4,000. Assume the car is purchased. It is used by the employee for 10 months of the year. In the other months, he was required to return the car to his employer's premises per company policy. He drives it for personal purposes for a total of 11,000 km. The minimum taxable benefit is: a. $2,160. b. $3,240. c. $2,455. d. $4,800. e. $4,752. f. $1,964. g. $1,650. h. $1,150. i. $2,250. j. $1,800. k. $3,300. l. $3,959. (The correct answer is l. $3,959 cuz I got marked, but I want to know the process of the calculation for this one. Thanks for reading)Megan Appliances leased an office space from Cindy Real Estate, Inc on July 1, 2020. The lease contract is 8 years. The rental payment of P600,000 is payable in advance, every July 1 starting July 1, 2020. Implicit rate is 10%. Cindy Real Estate is a dealer of office space and makes a profit through its leasing business. The carrying value of the office space on Cindy’s records is 2,800,000. Megan guaranteed the residual value of P100,000 upon its return of the asset to Cindy. Relevant PV factors are shown below:· PV of annuity due for 8 periods at 10%: 5.87· PV of ordinary annuity for 8 periods at 10%: 5.33· PV of 1 for 8 periods at 10%: 0.47How much is the dealer’s profit to be recognized by Cindy on commencement date? a. 769,000 b. 2,753,000 c. 3,569,000 d. None – this is a direct finance leaseMark wanted to expand his business and so he arranged to lease a special machine from Twain. This machine would enable him to produce his special furniture in half the time he previously used to manufacture the furniture items. To obtain the item Mark agreed to make an annual payment of $39,000 in arrears for three years and agreed to make a guaranteed residual payment of $16,000. The lease commenced on 1 July 2019. The financial year ended 30 June each year. The residual value of the asset was $22,000 and the interest rate on the lease was 7%. The fair value of the machine was $120,307.Required:(a)Prepare a lease payments schedule for Mark’s payments(b)Show the journal entries for the year ended 30 June 2020 .