For a purchase of a new passenger automobile on august 17, 2022, for $30,000 which is used 40% for business and 60% for personal use during the year, cost recovery deduction for the car for 2022 is $1,200. (Option A)
Cost recovery refers to the business ability to recover (deduct) their investment costs and plays an important role in establishing a business' tax base and can influence investment decisions. An automobile is a listed property which refers to a specific form of depreciable property that may be utilized primarily for business purposes. In order for a property to be considered listed property, it must be used for company’s business more than 50%. However, as the automobile purchased is used 40% for business, it does not qualify as listed property, neither 179 expensing (that allows businesses to write off the entire cost of an eligible asset in the first year) or additional first year depreciation can be taken. As a general rule, an automobile loses 10% of its value (depreciation) as soon as it is driven. Hence, the depreciation would be $30,000*0.1 = $3000. The cost recovery deduction would be $3000*0.4 = $1200.
Learn more about Cost recovery:
brainly.com/question/15102991
#SPJ4
Answer: True
Explanation:
Information asymmetry has to do with the study of decisions taken in transactions where one party has better or more information than the other party. These differences in information or asymmetry leads to a power imbalance in transactions, which can lead to transactions going awry.
When high level of information asymmetry exists between the insiders and outsiders in a business environment, it encourages higher use of debt relative to equity, and more reliance on short- term debt rather than on long- term debt.
Answer:
Option A
Explanation:
Firms treat Weighted average cost of capital(WACC) as the discount rate to calculate the net present value of a business and to evaluate investments that are most essential for capital budgeting.
Answer:
See below
Explanation:
Spending variance for supplies = Standard cost - Actual cost
Standard cost formulae = $1,110 per month + $11 per frame
Standard cost for actual output = $1,110 + ($11 × 611)
= $1,110 + $6,721
= $7,831
But actual cost = $8,250
Therefore,
Spending variance would be
= $7,831 - $8,250
= $419 unfavourable
The spending variance for supplies cost in November is closest to $419 unfavourable
Answer:
Date Account titles & Explanation Debit Credit
Apr-05 Merchandise Inventory $23,000
Accounts Payable $23,000
Apr-06 Merchandise Inventory $900
Cash $900
Apr-07 Equipment $26,000
Accounts Payable $26,000
Apr-08 Accounts Payable $3,000
Merchandise Inventory $3,000
Apr-15 Accounts Payable $20,000
($23,000-$20,000)
Merchandise Inventory $400
($20,000*2%)
Cash $19.600
