Yes, it makes financial sense because few families utilized her early hours.
Answer:
$5,000 Schedule A (Itemized Deductions)
Explanation:
Solution
Recall that:
George's total income amounts to =$5000
Property taxes equal =$3000
Operating costs are =$1500
Depreciation amounts to =$800
Now
Typically, according to the IRS guidelines, expenses incurred from a hobby are only allowable to the extent of the income generated by that hobby. Since a hobby is for personal enjoyment rather than profit, it cannot be classified as business profit and loss
Thus, George's deductible expense for the year totals $5,000 and should be reported on Schedule A (Itemized Deductions).
Answer: $160,000
Explanation:
To find the depletion rate per ton:
= ( Cost - residual value) / Capacity in tons
= (960,000 - 0) / 240,000
= $4 per ton
During the first year, the extraction was 40,000 tons. Thus, the depletion amount is:
= 40,000 * 4
= $160,000
