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- Stanford owns and operates two dry cleaning businesses. He travels to Boston to discuss acquiring a restaurant. Later in the month, he travels to New York to discuss acquiring a bakery. Stanford does not acquire the restaurant but does purchase the bakery on November 1, 2023. Stanford incurred the following expenses: Total investigation costs related to the restaurant $ 42,750 Total investigation costs related to the bakery 54,400 If required, round any division to two decimal places and use in subsequent computation. Round your final answer to the nearest dollar. What is the maximum amount Stanford can deduct in 2023 for investigation expenses?Craig has decided to start snow plowing during the winter months. He purchased a heavy-duty dump truck with plow and salter from Power Equipment for $40,000 on October 1st, 2026. He paid $1,000 as a down payment and the remaining balance on a 5% -7 year note to Power Equipment. You will be completing several accounting activities in regards to this purchase. 1. Prepare the Deprecation schedule in Excel for this dump truck with plow. Use the suggested life from an IRS publication 946, Chapter 4, Under Property Classes. Craig believes the salvage (residual) value will be $10,000 after its useful life. Craig will use the straight-line depreciation method for accounting purposes. Hint: In the first year and last year you will have partial depreciation. Include a column for Accumulated Depreciation and Book Value. Be sure your table is professional and fits on one page.May 2018, John purchased two hectares of land for $250,000 on which he planned to build a block of units but unfortunately he ran into financial difficulty. On 1 July 2020 he subdivided the land into two blocks and on 2 June 2021 he sold one block for $160,000 with settlement taking place on 5 July 2021. The market value of the remaining block was $240,000. The associated costs were as follows: Stamp duty on purchase Legal fees on purchase Subdivision costs Legal fees on sale Commission on sale $7,200 $1,400 $15,000 $1,600 $6,300 Required With reference to relevant legal authority, calculate any capital gain or loss on sale of the block to John in the year ended 30 June 2021?
- On March 1, 2019, Westmorlan Company acquired real estate on which it planned to construct a small office building. The company paid $75,000 in cash. An old warehouse on the property was razed at a cost of $8,600; the salvaged materials were sold for $1,700. Additional expenditures before construction began included $1,100 attorney’s fee for work concerning the land purchase, $5,000 real estate broker’s fee, $7,800 architect’s fee, and $14,000 to put in driveways and a parking lot.(a)Determine the amount to be reported as the cost of the land.Jos is a Sales Manager. He uses his own car to travel to various locations. He acquired the car on 1 October 2021 for $60,000. The acquisition cost was funded entirely by a loan at an interest rate of 15%. He has determined that the depreciation deduction on the car would be $2,300 for the year. In addition, Jos incurred the following expenses during the year: Registration and insurance = $2,000; Repairs and maintenance = $1,000; and Oil and fuel costs = $1,500. For the period 1 October 2021 to 30 June 2022, Jos estimates that the car travelled 15,000 kilometres, 12,000 of which were for business purposes. You may assume that Jos has maintained all necessary records and a logbook. Required: Calculate Jos's deduction for car expenses under the two methods (cent per kilometre rate 0.72 and logbook) in Div 28 of Income Tax Assessment Act 1997. Assume that depreciation has been adjusted for part-year use and the impact of the car limitAmy and Jevin Mounty own a textile design business in Beau Bassin. They bought a new computer which cost $4000 on 1 January 2020. The depreciation charge for the computer was 40% per annum using reducing balance method. Because of rapid developments in technology, the computer was out of date by end of 2021. Amy decided to sell the computer and was offered $600 which she accepted. The computer was sold on 31 December 2021. The financial year for the business runs from 1 January to 31 December.a. Calculate the accumulated depreciation charge and the net book value of the computer at the end of 2020 and 2021. b. Calculate the profit or loss on disposal of the computer.c. Show the Computer account and the Provision for depreciation Account for the year ended 31 December 2020. d. List down all the journal entries for the disposal of the computer.
- Alice purchased office furniture on September 20, 2022, for $100,000. On October 10, 2022, she purchased business computers for $80,000. Alice placed all of the assets in service on December 15, 2022. She did not elect to expense any of the assets under § 179, did not elect straight-line cost recovery, and did not take additional first-year depreciation. Determine the cost recovery deduction for the business assets for 2022 if these were her only capital purchases in the year. O $7,570 O $180,000 $7,856 $11,522Levi Ackerman decided to resign from his current job and start his own café. He is investing $50,000 of his own money and took out a business loan worth $100,000. Levi handed in his resignation in May 2021, purchased and fully paid for an established café costing $109,000 in June 2021, and plans to open shop on 1 July 2021. Additional information: Annual depreciation for the non-current assets taken over from the previous owner totals $18,000. Additional equipment costing $5,000 were purchased and paid for in June. These equipment are depreciated on a straight-line basis and have an expected useful life of ten years with no residual value. Assume that monthly payment for the loan is $780, of which $240 relates to interest payment and the remainder relates to principal repayment. One month’s credit is received from inventory suppliers and Levi will utilise this payment term, paying the amounts owed one day before it is due. Inventories costing $4,000 are acquired in June 2021.…Keri sold an investment property located in Sydney on 15 May 2021. The property was leased for the entire time that Keri owned it. The acquisition and the sale of the property are as follows: Purchase on 10 June 2015 Purchase price: $ 650,000 Stamp duty: $ 24,800 Legal costs: $ 2,700 Property Renovation: 86,800 Fines $350 for speeding Legal costs $78,000 to resolve disputes with neighbour regarding the driveway of the properties. Keri was awarded legal cost of $45,000 against her neighbour. Interest payments to Commonwealth Bank $248,000 Sales on 15 June 2021 for $ 2,570,000 Determine the taxable income and the tax payable /refundable
- Emily purchased a building to store inventory for her business. The purchase price was $760,000. Beyond this, Emily incurred the following necessary expenses to get the building ready for use: $10,000 to repair the roof as routine maintenance (did not improve or prolong the life of the asset), $6,000 to make the interior suitable for her finished goods, and $400 in legal fees. What is Emily’s cost basis in the new building? Meg O’Brien received a gift of some small-scale jewelry manufacturing equipment that her father had used for personal purposes for many years. Her father originally purchased the equipment for $1,700. Because the equipment is out of production and no longer available, the property is currently worth $4,000. Meg has decided to begin a new jewelry manufacturing trade or business. What is her depreciable basis for depreciating the equipment?Emily purchased a building to store inventory for her business. The purchase price was $630,000. Emily also paid legal fees of $750 to acquire the building. In March, Emily incurred $2,000 to repair minor leaks in the roof (from storm damage earlier in the month) and $7,500 to make the interior suitable for her finished goods. What is Emily's cost basis in the new building? Cost basisOn March 1, 2025, Crane Company acquired real estate, on which it planned to construct a small office building. by paying $86,500 in cash. An old warehouse on the property was demolished at a cost of $9.500; the salvaged materials were sold for $1,960. Additional expenditures before construction began included $1,460 attorney's fee for work concerning the land purchase, $5,150 real estate broker's fee. $8,960 architect's fee, and $15,300 to put in driveways and a parking lot. (a) Determine the amount to be reported as the cost of the land. Cost of the land $