This year, Amy purchased $4,200 of equipment for use in her business. However, the machine was damaged in a trafficaccident while Amy was transporting the equipment to her business. Note that because Amy did not place the equipmentinto service during the year, she does not claim any depreciation or cost recovery expense for the equipment.c. Suppose that after the accident, Amy could not replace the equipment so she had the equipment repaired for $3,900. What amountcan Amy deduct for the loss of the equipment?Deductible amount

The method by which companies and individuals can gradually recoup the cost of certain assets…

Answered: This year, Amy purchased $4,200 of…

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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Ryan is self-employed. This year Ryan used his personal auto for several long business trips. Ryan paid $2,400 for gasoline on these trips. His depreciation on the car if he was using it fully for business purposes would be $3,300. During the year, he drove his car a total of 19,800 miles (a combination of business and personal travel). (Round your final answers to the nearest whole dollar amount.) a. Ryan can provide written documentation of the business purpose for trips totaling 3,960 miles. What business expense amount can Ryan deduct (if any) for these trips?
2. Jordan has some damages on his business property when tornado hit his area. Her truck was used 100 percent for business use in her sole proprietorship. The truck had originally cost $35,000 and she had taken $5,000 depreciation. At the time of the disaster, it was worth $25,000. After the accident, it was $0. She received insurance company's payment of $20,000. How much is her deducible casualty loss? What is her deductible casualty loss if the truck's residual value was $5,000? 3. Fill in the blanks on the following like-kind exchanges Boot FMV of Adjusted basis of given new asset old asset a. b. 17000 15000 4000 C. d. 16000 e. 7000 0 0 6000 0 0 14000 29000 8000 28000 12000 Boot Realized received Gain/(loss) 0 0 500 0 4000 Recognized Postponed gain/loss Gain/loss New basis of received property
Moran owns a building he bought during year 0 for $198,000. He sold the building in year 6. During the time he held the building, he depreciated it by $50,000. What are the amount and character of the gain or loss Moran will recognize on the sale in each of the following alternative situations? Note: Loss amounts should be indicated by a minus sign. Enter NA if a situation is not applicable. Leave no answer blank. Enter zero if applicable. c. Moran received $136,000.
Teresa's manufacturing plant is destroyed by fire. The plant has an adjusted basis of $270,000, and Teresa receives insurance proceeds of $410,000 for the loss. Teresa reinvests $420,000 in a replacement plant within 2 years of receiving the insurance proceeds.
Mona owns a rental house that she has rented to various tenants since September of 2001. The backyard fence fell into disrepair in June of 2018. She had it replaced June 27th, 2018 for $8,399. lf Mona elects to use special depreciation for the new fence, what is the amount of current depreciation (excluding the amount of current special depreciation) for thisasset? a) $0b) $210c) $315d) $420
Butte sold a machine to a machine dealer for $51,200. Butte bought the machine for $53,800 several years ago and has claimed $11,900 of depreciation expense on the machine. What is the amount and character of Butte's gain or loss?
Karyn loaned $32,000 to her co-worker to begin a new business several years ago. If her co worker declares bankruptcy on june 22 of the current year, how much of the bad debt loss will Karyn be able to deduct this year?
Domestic
Alexandra sold equipment that she uses in her business for $101,300. Alexandra bought the equipment two years ago for $90,650 and has claimed $12,975 of depreciation expense. What is the amount and character of Alexandra's gain or loss?
Sidney is a car salesman. As a result of being the best salesman for the year, his employer permits him to buy a new BMW with a cost of Fair Market Value to the dealer of $40,000 for only $25,000. This is to be Sidney's personal vehicle and not used in business. As a result of this purchase, Sydney must report. Zero Income or Loss $40,000 income $15,000 income $20,000 income
Required information [The following information applies to the questions displayed below.] This year, Amy purchased $2,000 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 $1,800 or selling the equipment to a junk shop for $300. Amy sold the equipment. What amount can Amy deduct for the loss of the equipment? Deductible amount
Moran owns a building he bought during year 0 for $198,000. He sold the building in year 6. During the time he held the building, he depreciated it by $50,000. What are the amount and character of the gain or loss Moran will recognize on the sale in each of the following alternative situations? Note: Loss amounts should be indicated by a minus sign. Enter NA if a situation is not applicable. Leave no answer blank. Enter zero if applicable. b. Moran received $213,000.

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