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mote1985 [20]
3 years ago
7

Potomac LLC purchased an automobile for $31,200 on August 5, 2020. What is Potomac's depreciation deduction for 2020

Business
1 answer:
morpeh [17]3 years ago
5 0

Answer:

Potomac LLC

Depreciation deduction for 2020 is:

$2,600.

Explanation:

a) Data and Calculations:

August 5, 2020, Purchase of an automobile for $31,200

Depreciation rate = 20% for year 1

Depreciation expense = $31,200 * 20% * 5/12 months

= $2,600

b) Automobiles attract 20% depreciation in the first year.  However, since Potomac LLC purchased the automobile on August 5, 2020, the depreciation expense of $6,240 ($31,200 * 20%) will be prorated for five months, giving an average of $520 per month.  This results to $2,600 ($520 * 5).

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Philip Morris bought Miller Brewing and launched low-calorie beer, at a time when consumers had the impression that low-calorie
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Answer: Points of indifference

Explanation: Point of indifference can be defined as that level of EBIT at which two alternative financial plans have same amount of net income. It is used by managers as an evaluating tool, when it comes to choose between two cost structures which are alternative of one other.

In the given case, the company must have  build point of indifference before launching of new product, and must have expected higher profits than normal beer.

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3 years ago
Jonathan (an individual) owns 100% of the stock of Husky, Inc. (a C corporation) and 100% of the stock of Calhoun, Inc. (another
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Answer: A. As Expenses

B. No treatment.

Explanation:

A. The $100,000 was not structured and a loan so it will be accounted for as EXPENSES. This means that it will be deducted from the Income for the year from Calhoun's books.

B. A C Corporation is by definition taxed SEPARATELY from it's owners in the United States of America. Seeing as both Corporations were C Corporations, Jonathan as the owner of both companies need not worry about how he should treat the $100,000 payment as he will not ne taxed on it.

8 0
3 years ago
Following is a partial process cost summary for Mitchell Manufacturing's Canning Department. Equivalent Units of Production Dire
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Answer:

5. $232,000.

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In order to find out the total conversion cost, we simply multiplied the number of units completed and transferred out with the cost per equivalent unit

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3 years ago
Henry Ford once said, "If I had asked people what they wanted, they would have said faster horses." The invention of the car is
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<u>Answer: </u>

The invention of the car is an early example of disruptive technologies.

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  • The technologies that successfully break a certain long-running trend to start another successfully can be termed as disruptive technologies.
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