BUS 345 Answers to Chp 5 Assignment Problems #1

BUS 345 Answers to Chp 5 Assignment Problems #1 - CHAPTER...

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CHAPTER FIVE SOLUTIONS - #1 Solution to Assignment Problem Five - 1 Case A In this Case, the taxable benefit would be calculated as follows: Standby Charge [(2%)($30,000)(12) x (7,200/ 20,004 )] $2,591 Operating Cost Benefit - Lesser Of : [(7,200)($0.22)] = $1,584 [(1/2)($2,591)] = $1,296 1,296 Total Benefit $3,887 As Mr. Stickler’s usage is more than 50 percent employment related, he can use the one-half the standby charge as his operating cost benefit. Reduction formula denominator if > 50% employment = 1,667 x # of months avail. (12) = 20,004 Case B In this Case, the taxable benefit would be calculated as follows: Standby Charge [(2%)($30,000)(10)(15,000/ 16,670 )] $5,399 Operating Cost Benefit - Lesser Of: [(15,000)($0.22)] = $3,300 [(1/2)($5,399)] = $2,700 2,700 Total Benefit $8,099 As Mr. Stickler’s usage is more than 50 percent employment related, he can use the one-half the standby charge as his operating cost benefit. 1,667 x 10 = 16,670
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In this Case, the taxable benefit would be calculated as follows: Standby Charge [(2%)($30,000)(6)] $3,600 Operating Cost Benefit [(25,200)($0.22)] 5,544 Total Benefit $9,144 In this Case, one-half of the standby charge would be less than the regular operating cost benefit. However,
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This note was uploaded on 10/07/2008 for the course BUS 343 taught by Professor Leung during the Fall '08 term at Kwantlen Polytechnic University.

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BUS 345 Answers to Chp 5 Assignment Problems #1 - CHAPTER...

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