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30. John, a rental car dealer on Miami Beach, is considering opening a beauty salon in San Francisco. After spending $8,000 investigating such possibilities in San Francisco, John decides notto open the salon. As a consequence, the $8,000 is:a. Capitalized and amortized over 189 monthsb. Capitalized and deductible over the life of the businessc. Deduct $5,000 and amortize the balance over 180 monthsd. Not deductible31. Nicholas wanted to take an important customer to a hockey game. Although the face value of a ticket was only $50, the only way he could get tickets was by paying a scalper $160 for each ticket. Assuming all other deductibility requirements are met, how much will Nicholas be able to deduct for each ticket?
Chapter 5: Business Expenses 1332.Isabel owns a vacation home in Hawaii. During the year she rented it out for one week and used it forpersonal purposes three weeks. Her expenses directly related to renting out the property were: rental commission ($30) and maid service ($25). The allocated portion of taxes and interest was $400. Income from the rental was $300. Isabel should:33. In 2012, Jasmin loaned her friend Janelle $5,000 to invest in various stocks. Janelle signed a note to repay the principal with interest. In 2013, the stock market plunged and Janelle incurred large losses. In late 2013, Janelle declared personal bankruptcy and Jasmin was unable to collect any of her loan. Jasmin had no other gains or losses in 2012 or 2013. Her income from wages in both 2012 and 2013 was $50,000. The result is:34. Fabricio, Inc. is an accrual basis corporation. Fabricio ages its receivables to calculate the addition to its reserve for bad debts. The following were reported during the current year:Credit sales$300,000Collections on credit sales260,000Amount added to the reserve for bad debts25,000Beginning balance in the reserve0Identifiable bad debts written off during the current year18,000The amount deductible for bad debt expense on Fabricio’s tax return for the current year is:a. $18,000b. $25,000c. $40,000