Anja is an advisor. She uses her own car to travel to various locations to meet...

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Accounting

Anja is an advisor. She uses her own car to travel to variouslocations to meet clients. She acquired a car on 1 March 2020 for$57,000. The acquisition cost was funded entirely by a loan at aninterest rate of 10%. She has determined that the depreciationdeduction on the car would be $5,700 for the year. In addition,Anja incurred the following expenses during the year:
• Registration and insurance = $5,000;
• Repairs and maintenance = $300; and
• Oil and fuel costs = $4,100.
For the period 1 March 2020 to 30 June 2020, Anja estimates thatthe car travelled a total of 12,000 kilometres; 8,000 of which werefor business purposes. You may assume that Anja has maintained allnecessary records and a logbook. Assume that depreciation has beenadjusted for partial year use and the impact of the car limit.
i. Calculate Anja's deduction for car expenses under "cents perkilometre" method 1.5 marks
ii. Calculate Anja's deduction for car expenses under log bookmethod 1.5 marks
iii. Which method is preferable for Anja and why? 2 marks

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Solutions i Cents per kilometre method s2815 Four methods Number of business kilometres thecar travelled in the income year x Number of cents based on the cars engine capacity s2825 How to calculate 5 000 x See Answer

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