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11 February, 23:41

This year, Clark leased a car to drive between his office and various work sites. Clark carefully recorded that he drove the car 23,000 miles this year and paid $7,200 of operating expenses ($2,700 for gas, oil, and repairs, and $4,500 for lease payments). What amount of these expenses may Clark deduct as business expenses? a) $7,200. b) Clark cannot deduct these costs but he must use the mileage method to determine any deduction. c) $4,500. d) $2,700. e) Clark is not entitled to any deduction if he used the car for any personal trips.

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  1. 12 February, 01:15
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    The total amount of expenses Clark can deduct as business expenses:

    a) $7,200

    Explanation:

    The total deductible business expenses can be expressed as;

    T=O+L

    where;

    T=Total deductible business expenses

    O=operating expenses

    L=lease payments

    In our case;

    T=unknown

    O=$2,700

    L=$4,500

    replacing;

    T=2,700+4,500=7,200

    The total amount of expenses Clark can deduct as business expenses=$7,200
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