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viva [34]
3 years ago
14

Stanford owns and operates two dry cleaning businesses. He travels to Boston to discuss acquiring a restaurant. Later in the mon

th, he travels to New York to discuss acquiring a bakery. Stanford does not acquire the restaurant but does purchase the bakery on November 1, 2019. Stanford incurred the following expenses: Total investigation costs related to the restaurant= $28,000 Total investigation costs related to the bakery= $51,000 What is the maximum amount Stanford can deduct in 2019 for investigation expenses?
Business
1 answer:
denis23 [38]3 years ago
3 0

Answer:

The answer is: $4,522

Explanation:

Since Stanford doesn't operate in the restaurant business and doesn't buy the restaurant, he cannot deduct any amount for investigation costs relating to the restaurant.

Stanford doesn't operate in the bakery business but he bought the bakery, so he can deduct up to $5,000 (before amortization) for investigation costs related to the bakery. But those $5,000 are reduced by every dollar he spent over $50,000, so he can only deduct $4,000 [= $5,000 - ($51,000 - $50,000)].

The remaining $47,000 (= $51,000 - $4,000) can be amortized over 180 months, which equals $261 per month (= $47,000 / 180 months).

Since he bought the restaurant in November, he can deduct two months: $261 per month x 2 months = $522

So his total deduction for investigation expenses is = $4,000 + $522 = $4,522

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Answer:

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2 years ago
jackson's programming paid its june rent of $500 cash. demonstrate how to use the accounting equation to record the transaction
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1 year ago
Alex just graduated from college and is now in the market for a new car. He has saved up $4,000 for a down payment. He's decidin
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1.  Medium of exchange, 2. Unit of Account and 3. Store of value

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Please see attachment

4 0
3 years ago
You want to start an organic garlic farm. The farm costs $230,000, to be paid in full immediately. Year 1 cash inflow will be $2
Nostrana [21]

Answer:

13.8%

Explanation:

IRR is the discount rate that equates the after tax cash flows from an investment to the amount invested.

IRR can be calculated using a financial calculator:

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To find the IRR using a financial calacutor:

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2. After inputting all the cash flows, press the IRR button and then press the compute button.

I hope my answer helps you

5 0
2 years ago
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