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Andre is an advisor. He uses his own car to travel to various locations to meet clients. He acquired a car on 1 March 2020

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Andre is an advisor. He uses his own car to travel to various locations to meet clients. He acquired a car on 1 March 2020 for $45,000. The acquisition cost was funded entirely by a loan at an interest rate of 5%. He has determined that the depreciation deduction on the car would be $9,000 for the year. In addition, Andre incurred the following expenses during the year: Registration and insurance = $3,000; Repairs and maintenance = $2000; and Oil and fuel costs = $500. For the period 1 March 2020 to 30 June 2020, Andre estimates that the car travelled a total of 20,000 kilometres; 16,000 of which were for business purposes. You may assume that Andre has maintained all necessary records and a logbook. Assume that depreciation has been adjusted for partial year use and the impact of the car limit. A. Calculate Andre's deduction for car expenses under "cents per kilometre" method 1.5 marks B. Calculate Andre's deduction for car expenses under log book method 1.5 marks C. Which method is preferable for Andre and why? 2 marks

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