Brent Bishop is the vice president of operations for Southern Sweets Bakery. He drives a 2017 Toyota Prius Prime as his company car, and it has a fair market value of $37,500. The annual lease for the vehicle is $9,750. He reported driving 34,750 miles during 2018, of which 20 percent were for personal reasons. The company pays his fuel and charges him five cents per mile for fuel charges. Required: Using the lease value rule, what is the valuation of Brent's company car benefit? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Question

Amir Glenn

Business

23 November, 05:56

Brent Bishop is the vice president of operations for Southern Sweets Bakery. He drives a 2017 Toyota Prius Prime as his company car, and it has a fair market value of $37,500. The annual lease for the vehicle is $9,750. He reported driving 34,750 miles during 2018, of which 20 percent were for personal reasons. The company pays his fuel and charges him five cents per mile for fuel charges. Required: Using the lease value rule, what is the valuation of Brent's company car benefit? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

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Ming · Answer 1

Answer and Explanation:

fair market value=$ 37,500

Residual value = $ 10,600

Lease term = 12 months

Rate = 20%

Ans:

Monthly pay = $2668.53

Total of 12 months payments = $32,022.42

Total interest = $ 5122.42

Principle amount = 84%

Interest = 16%

Benefits of the brent's company car are pay the 35600 miles during $ 32000 approx.