AC 309 Unit 4 Chapter Problems
AC 309 Unit 4 Chapter Problems
AC 309 Unit 4 Chapter Problems
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UNIT 4<br />
Perform <strong>Chapter</strong> 8 <strong>Problems</strong> 24, 33, 35, 36 & 45 (Pages 8-40, 41 & 42 in the text) and <strong>Chapter</strong> 9<br />
<strong>Problems</strong> 3, 9, 15, 27 & 28 (Pages 9-37, 38, 39 & 40 in the text)<br />
<strong>Chapter</strong> 8<br />
24. LO.4 Discuss how the limits on cost recovery apply to listed property.<br />
33. LO.2 Orange Corporation acquired new office furniture on August 15, 2014, for $210,000.<br />
Orange elects immediate expensing under § 179. Orange does not claim any available additional<br />
first-year depreciation. Determine Orange’s cost recovery for 2014.<br />
35. LO.2 Juan acquires a new 5-year class asset on March 14, 2014, for $200,000. This is the<br />
only asset Juan acquired during the year. He does not elect immediate expensing under § 179.<br />
He does not claim any available additional first-year depreciation. On July 15, 2015, Juan sells<br />
the asset.<br />
45. LO.2, 3, 9 Lori, who is single, purchased 5-year class property for $31,000 and 7-year class<br />
property for $42,000 on May 20, 2014. Lori expects the taxable income derived from her<br />
business (without regard to the amount expensed under § 179) to be about $100,000. Lori wants<br />
to elect immediate § 179 expensing, but she doesn’t know which asset she should expense<br />
under § 179. She does not claim any available additional first-year depreciation.<br />
<strong>Chapter</strong> 9<br />
3. LO.1 Mason performs services for Isabella. In determining whether Mason is an employee or<br />
an independent contractor, comment on the relevance of each of the factors listed below.
a. Mason performs services only for Isabella and does not work for anyone else.<br />
9. LO.2 In 2012, Emma purchased an automobile, which she uses for both business and<br />
personal purposes. Although Emma does not keep records as to operating expenses (e.g., gas,<br />
oil, and repairs), she can prove the percentage of business use and the miles driven each year.<br />
In March 2014, Emma seeks your advice as to what income tax benefit, if any, she can derive<br />
from the use of her automobile. What would you suggest?<br />
15. LO.3 Rick is scheduled to go to London on business and would like to do some sightseeing<br />
while there. A colleague advises him that to maximize his deductible expenses, he should plan<br />
the business and personal portions of the trip carefully to make effective use of weekends and<br />
holidays. What is meant by this advice?<br />
27. LO.10 Comment on the deductibility of each of the following items:<br />
28. LO.2, 3. During the year, Olivia holds two jobs. After an eight-hour day at the first job, she<br />
works three hours at the second job. On Fridays of each week, she returns home for dinner<br />
before going to the second job. On the other days (Monday through Thursday), she goes directly<br />
from the first job to the second job, stopping along the way for a meal. The mileage involved is as<br />
follows:<br />
Home to first job 15<br />
First job to second job 18<br />
Home to second job 20