FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transportation (LO 3.3)

Teresa is a self-employed civil engineer who uses her automobile for business. Teresa drove her automobile a total of 11,965 miles during 2020, of which 80% was business mileage. The actual cost of gasoline, oil, depreciation, repairs, and insurance for the year was $6,440. Teresa is eligible to use the actual or standard method.

If required, round your answers to the nearest dollar.

a.  How much is Teresa's transportation deduction based on the standard mileage method?
$fill in the blank f77e440a8016001_1

 

b.  How much is Teresa's transportation deduction based on the actual cost method?
$fill in the blank 4eb51bfe9039fc8_1

 

c.  Which method should Teresa use to calculate her transportation deduction?

Since the 

 

 method yields the larger deduction, Teresa should use the 

 

 method to determine her deduction.

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