Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Note 8: During the year 201?, James decided that it would be more efficient to have Susan work out of their home instead of working

image text in transcribed
Note 8: During the year 201?, James decided that it would be more efficient to have Susan work out of their home instead of working at the bike shop. Starting March 1, 2017, a room in James and Susan's home was set aside for the exclusive use of Susan's bookkeeping functions. The space used represents 10% of the entire surface of the home (20 sq.m). The costs paid by James for the home ofce in 2017 (prorated for the period starting March 1) are as follows: Home Insurance $1,500 Interest on mortgage $7,500 Property taxes $4,800 Home telephone line $500 Utilities $6,000 Maintenance and repairs \"@000 TOTAL $25,300 x 10% = $2,530 The home was acquired by James in 2015 at a cost of $500,000 of which $90,000 was allocated to the land. Note 9: The interest expense includes $1,150 paid during the entire year 2017 on a loan to acquire the truck used for the business see Note 11 below. Note 10: The salaries expense is for one mechanic (George Dewlitle) and one bookkeeper (Susan Bond). George is paid a gross salary of $1,000 per week ($52,000i'yr). James also employs his common-law partner, Susan, who does all the bookkeeping for a gross salary of $23,000 per year. The T4 slip to Susan indicated CPP withheld at source was $965.25 (box 16), El withheld was $3?4.90 (box 18) and Federal Income tax withheld was $3,500.00 (box 22). Note 11: James has an extended cab pickup truck that he uses for both business and personal purposes. James says the truck is used ?5% of the time for the business - the rest is personal. Total distance driven for the year was 30,900km. Total expenses relating to the truck for the year paid by the business were as follows (already included in income statement above): Insurance $1,500 Interest on loan $1,150 Fuel $3,210 Car washes $290 Maintenance $3,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Mark Nelson, Lawrence Tomassini

5th Edition

0077282078, 9780077282073

More Books

Students also viewed these Accounting questions