Answer:
Business expense is $25,000
Explanation:
Business related cost incurred by Alvin should be a proportion of the total cost. We need to estimate business related percentage of his activities and allocated business expense appropriately.
Alvin used an estimated 6,000 miles on his truck for personal use out of a total of 36,000 miles.
The percentage of business related miles= (36,000-6,000)/36,000= 0.833333
Total expenses= Cost of lease + Cost of gas, oil, and repairs
Total cost= 18,000+ 12,000= $30,000
Business expense= Percent of business related cost* Total cost
Business expense= 0.8333333* 30,000
Business expense= $24,999.99~ $25,000
