In February 2021, Pietra acquired a new automobile for $82,000 and used the automobile 80% for business. In 2022 her business use of the auto was 70%. Pietra's depreciation deduction for 2022 will be a. $11,270. b. $18,368. c. $12,670. d. $4,032.

In February 2021, Pietra acquired a new automobile for $82,000 and used the automobile 80% for business. In 2022 her business use of the auto was 70%. Pietra's depreciation deduction for 2022 will be a. $11,270. b. $18,368. c. $12,670. d. $4,032.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

In February 2021, Pietra acquired a new automobile for $82,000 and used the automobile 80% for business. In 2022 her business use of the auto was 70%. Pietra's depreciation deduction for 2022 will be

a.

$11,270.

b.

$18,368.

c.

$12,670.

d.

$4,032.

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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