Charlotte owns a custom publishing business. She uses 500 square feet of her home (2,000 square feet) as an office and for stora
ge. All her business has come from telemarketing (telephone sales), direct mailings, or referrals. In her first year of operation, she has revenues of $37,000, cost of goods sold of $25,900, and other business expenses of $8,100. The total expenses related to her home are:
1 answer:
Answer:
As calculated below (attachment)She must deduct the expenses related to interest and taxes first, then deduct her other business expenses, then at last the depreciation.She may carry forward the $1,105 ($145 limit- $1,250 current depreciation) which she is not ble to use in the current year to a future year when her business has sufficient income to absorb the deduction.
Explanation:
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Answer:
1. Book value at end of year 2 = $13,130
2. Depreciation from year 3 for last 3 years = $3,710 each year, that is $11,130 for three years.
Explanation:
As for the provided details, we have:
Cost of machinery = $23,860
Expected life = 4 years
Salvage value = $2,400
Straight line depreciation =
Under straight line method depreciation remains constant for life of asset.
Book value at end of year 2 = $23,860 - ($5,365 2) = $13,130
Thereafter in the beginning of year 3 the estimate is made to realize that the total remaining life expected is 3 years, with salvage value $2,000
Thus, depreciation from year 3 =
Therefore, depreciation from year 3 to year 5 = $3,710 each year.
Total depreciation of last 3 years = $3,710 3 = $11,130