Deduction Concepts (LO. 5) A truck owned by Duster Demolition Services is involved in an accident. The truck originally cost $41,800, and $25,850 of depreciation had been taken on the truck as of the date of the accident. The cost of repairing the truck is $9,600, for which the insurance company reimburses Duster $7,500. a. Duster is entitled to deduct a loss of $ as a result of the accident, b. The adjusted basis of the truck after the accident is $ Deduction Concepts (LO. 5) Davidson Industries manufactures golf course maintenance equipment. The equipment comes with a 4-year warranty. Davidson's engineers estimate that approximately 10% of the equipment will be defective and require payment under the warranty. What is the propriety of allowing Davidson a deduction for warranty costs in the current year if: a. Davidson is a cash basis taxpayer. Therefore, Davidson's current year deduction is the Davidson will deduct the expenses when defects under warranty b. Davidson is an accrual basis taxpayer. and the amount of the expense can be Davidson's Davidson can deduct the expenses when the current year deduction is the for defects under warranty