Answer:
2273
Explanation:
In this question, we are asked to calculate Tom Tom’s maximum depreciation for this first year.
The term maximum depreciation is accounting principle talks about to what extent has the value of an asset been used.
To calculate his maximum depreciation, we need to be conversant with some conventions. The mid-month convention is what we need to understand here. What the convention assumes is that an asset which is placed into service during a given month is assumed to have been placed into
Such service at the middle of such month in question. Also, it is also assumed that disposing an asset at the beginning of one month or any other time of the month is same as disposing the said asset at the middle of the month. This is what the mid month convention is talking about.
It must also be noted that Residential property has a 27.5-year recovery period. The depreciation is thus $2,273 ($100,000 x 2.273%). This gives us the value of the maximum depreciation
Answer: Work plan
Explanation:
A work plan is a step by step procedure used by an individual/organization to enable them effectively achieve their objectives.
A business research project is an extensive study done on a business, to obtain ways of improving the business and increasing sales.
For a business research project to be effectively conducted, a work plan that outlines steps to be taken should be created and strictly followed.
The two methods that are typically used when closing agents and lenders calculate items that need to be prorated are the 12-month/360 day method and the actual/365 day method.
The 12-month/360 day method assumes each month contains 30 days, regardless of how many days are actually in a month.
This method is generally used for mortgage payments. The actual/365 day method considers the actual number of days in each month and accounts for leap years.
This method is generally used when prorating taxes, insurance, or rent.
To know more about mortgage payment, refer here:
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