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hichkok12 [17]
3 years ago
13

Brent Bishop is the vice president of operations for Southern Sweets Bakery. He drives a 2017 Toyota Prius Prime as his company

car, and it has a fair market value of $37,500. The annual lease for the vehicle is $9,750. He reported driving 34,750 miles during 2018, of which 20 percent were for personal reasons. The company pays his fuel and charges him five cents per mile for fuel charges. Required: Using the lease value rule, what is the valuation of Brent’s company car benefit? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Business
2 answers:
prohojiy [21]3 years ago
8 0

Answer and Explanation:

fair market value=$ 37,500

Residual value = $ 10,600

Lease term = 12 months

Rate = 20%

Ans:

Monthly pay = $2668.53

Total of 12 months payments = $32,022.42

Total interest = $ 5122.42

Principle amount = 84%

Interest = 16%

Benefits of the brent's company car are pay the 35600 miles during $ 32000 approx.

ella [17]3 years ago
8 0

Answer:

$2,297.50

Explanation:

if we assume that the annual lease is the same as publication 15-b value, then Brent's fringe benefits are:

annual lease value x miles driven for personal reasons = $9,750 x 20% = $1,950

+

fuel = (34,750 miles x 20%) x $0.05 per mile = $347.50

total fringe benefits = $1,950 + $347.50 = $2,297.50

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