In the current year, Ms. Patel is provided with a vehicle leased by her employer, Everex Ltd. The vehicle originally cost $30,000 and was leased by Everex Ltd. in the prior year, on a 36-month lease ter provides you with the following information: Days the vehicle was available for use by Ms. Patel in the current year: 250 Days the vehicle was leased by Everex Ltd. in the current year: 365 Fair market value of the vehicle in the current year: $14,500 Lease payments (including HST, excluding insurance): $820 per month Total kilometres driven in the current year: 29,000 Personal kilometres driven in the current year: 15,000 The minimum standby charge arising from the employer leased vehicle for Ms. Patel in the current year is: O A. $6,560 OB. $3,279 O C. $2,320 O D. $4,373

In the current year, Ms. Patel is provided with a vehicle leased by her employer, Everex Ltd. The vehicle originally cost $30,000 and was leased by Everex Ltd. in the prior year, on a 36-month lease ter provides you with the following information: Days the vehicle was available for use by Ms. Patel in the current year: 250 Days the vehicle was leased by Everex Ltd. in the current year: 365 Fair market value of the vehicle in the current year: $14,500 Lease payments (including HST, excluding insurance): $820 per month Total kilometres driven in the current year: 29,000 Personal kilometres driven in the current year: 15,000 The minimum standby charge arising from the employer leased vehicle for Ms. Patel in the current year is: O A. $6,560 OB. $3,279 O C. $2,320 O D. $4,373

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

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

In the current year, Ms. Patel is provided with a vehicle leased by her employer, Everex Ltd. The vehicle originally cost $30,000 and was leased by Everex Ltd. in the prior year, on a 36-month lease term. Ms. Patel
provides you with the following information:
Days the vehicle was available for use by Ms. Patel in the current year: 250
Days the vehicle was leased by Everex Ltd. in the current year: 365
Fair market value of the vehicle in the current year: $14,500
Lease payments (including HST, excluding insurance): $820 per month
Total kilometres driven in the current year: 29,000
Personal kilometres driven in the current year: 15,000
The minimum standby charge arising from the employer leased vehicle for Ms. Patel in the current year is:
O A. $6,560
O B. $3,279
OC. $2,320
O D. $4,373

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