Date Asset Cost 12-Jan Car 24,000 4-Feb Equipment 36,000 15-Mar Qualified leasehold improvement 40,000 24-Apr Computers 10,000 Total 110,000 Tom has $50,000 in profits before depreciation expense and has no other sources of income. Tom does not expect to purchase any new assets next year and hopes to grow sales, but who knows for sure?
Date Asset Cost 12-Jan Car 24,000 4-Feb Equipment 36,000 15-Mar Qualified leasehold improvement 40,000 24-Apr Computers 10,000 Total 110,000 Tom has $50,000 in profits before depreciation expense and has no other sources of income. Tom does not expect to purchase any new assets next year and hopes to grow sales, but who knows for sure?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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Tom purchased the following assets for use in his business during the current year:
|
Date |
Asset |
Cost |
|
12-Jan |
Car |
24,000 |
|
4-Feb |
Equipment |
36,000 |
|
15-Mar |
Qualified leasehold improvement |
40,000 |
|
24-Apr |
Computers |
10,000 |
|
Total |
110,000 |
Tom has $50,000 in profits before depreciation expense and has no other sources of income. Tom does not expect to purchase any new assets next year and hopes to grow sales, but who knows for sure?
Give Tom two options as to how to
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