On October 1, Purr-fect Patty bought some new equipment for her Purr-fect Pet Park, Purr-fectPaw Patrol, and Purr-fect Pedi Paw Palace from Teddy and Rowdy's Woofing Equipment. Shefelt it was time to replace all of her equipment (she sold all of her old equipment lastShe purchased a total $316,869 in equipment for her business. She paid $33,333 inthe remaining balance on account. All balances on account mustfully paid within threeputmonths. The equipment has an expected life of 11.25 years and a salvage value of $30,399. Itwill all be depreciated using the straight-line method.

I understand you'd like help with analyzing Purr-fect Patty's equipment purchase and depreciation…

Answered: On October 1, Purr-fect Patty bought…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 59P

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A major repair on the suspension system of Jane’s 3-year old car cost her $2000 because the warranty expired after 2 years of ownership. Based on this experience, she will plan on additional $2000 expenses every 3 years henceforth. Also, she spends $800 every 2 years for maintenance now that the warranty is over. This is for years 2, 4, 6, 8, and 10, when she plans to donate the car to charity. Use these costs to determine Jane’s equivalent annual cost for years 1 through infinity at i = 5% per year, if cars she owns in the future have the same cost pattern. Solve using tabulated factors and a spreadsheet, as requested by your instructor.
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?$In the second year, Maria uses the laserjet to print 56,000 pages. What is the annual depreciation for year 2?$
Rebecca is a doctor with an AGI of $139,000 before consideration of income or loss from her dog breeding business. Her home is on 15 acres, 10 of which she uses to house the animals and provide them with ample space to play and exercise. Her records show the following related income and expenses for the current year Income from fees and sales Expenses: Dog food Veterinary bills. Supplies Publications and dues Required: a. How must Rebecca treat the income and expenses of the operation if the dog breeding business is held to be a hobby? Note: Leave no cells blank, Enter "0" wherever required. $3,200 $ 4,700 4,200 1,480 490 b. How would your answer differ if the operation were held to be a business? Note: Leave no cells blank. Enter "0" wherever required. Enter all losses with a minus sign. a: Schedule C Business income/(loss) a. Other Income/(loss) a Expenses- (Schedule A) b. Schedule C Business income/(loss) b. Other Income/(loss) b. Expenses-(Schedule A)
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Jane is a roofing contractor. Jane's friend needed a new roof but did not have the cash to pay. Jane's friend instead paid with a used truck that Jane could use in her roofing business. The truck had originallycost the friend $17,500 but it was gently used and only worth $6,000. Jane did not actually need the truck and ended up selling it to a used car dealer for $5,200 a few months later. Explain what amount of gross income Jane must recognize as a result of the truck payment and why.
Igor owns a rental house and had to paint the living room, kitchen and bathroom after the most recent tenant moved out. The rooms had not been painted in the last five years and he worried he would not be able to rent it out to another tenant at the current fair market value if he didn’t repaint. The cost to repaint the three rooms was $1,500 ($1,000 labor and $500 paint). What amount, if any, can Igor deduct of this expense and on what form should it be listed?
Rebecca is a doctor with an AGI of $128,000 before consideration of income or loss from her dog breeding business. Her home is on 15 acres, 10 of which she uses to house the animals and provide them with ample space to play and exercise. Her records show the following related income and expenses for the current year: Income from fees and sales $ 2,650 Expenses: Dog food $ 4,150 Veterinary bills 3,650 Supplies 1,260 Publications and dues 380 Required: How must Rebecca treat the income and expenses of the operation if the dog breeding business is held to be a hobby? (Leave no cells blank. Enter "0" wherever required.) How would your answer differ if the operation were held to be a business? (Leave no cells blank. Enter "0" wherever required. Enter all losses with a minus sign.)
A major repair on the suspension system of Jane's 3-year old car will cost her $3.000 every 3 years henceforth (i.e., years 3, 6, and 9) because the warranty expired after 2 years of ownership. Also, she will spend $600 every 2 years (i.e., years 2. 4, 6, 8 and 10) for maintenance now that the warranty is over until she donates the car to charity in year 10. Use these costs to determine Jane's equivalent annual cost for years 1 through 10 at i = 5% per year.
This year, Amy purchased $4,200 of equipment for use in her business. However, the machine was damaged in a traffic accident while Amy was transporting the equipment to her business. Note that because Amy did not place the equipment into service during the year, she does not claim any depreciation or cost recovery expense for the equipment. a. After the accident, Amy had the choice of repairing the equipment for $2,690 or selling the equipment to a junk shop for $475. Amy sold the equipment. What amount can Amy deduct for the loss of the equipment? Deductible amount
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