Mackensie Owns a Condominium in the Rocky Mountains Using the Court's Method of Allocating Expenses and Assuming a Uses

question 19

Multiple Choice

Mackensie owns a condominium in the Rocky Mountains.During the year,Mackensie uses the condo a total of 23 days.The condo is also rented to tourists for a total of 77 days and generates rental income of $10,900.Mackensie incurs the following expenses in the condo: $$\begin{array} { | l | r | } \hline \text { Expense } & \text { Amount } \\\hline \text { Mortgage interest } & \$ 5,000 \\\hline \text { Property taxes } & 3,500 \\\hline \text { Utilities } & 2,500 \\\hline \text { Insurance } & 1,800 \\\hline \text { Depreciation } & 11,000 \\\hline\end{array}$$ Using the court's method of allocating expenses and assuming a 365-day year,the amount of depreciation that Mackensie may take with respect to the rental property will be

• A)$0.
• B)$1,044.
• C)$5,796.
• D)$11,000

Recognize the purpose and necessity of adjusting entries in the preparation of financial statements.

Identify indicators that signify the completion and balance of an end-of-period spreadsheet.

Understand the relationship between the end-of-period spreadsheet and financial statement preparation steps.

Practice distinguishing account types and where they are reported on financial statements.

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Definitions:

Estopped

A legal principle that prevents a person from asserting a claim or right that contradicts what they previously stated or agreed to by their actions or failure to act.

Auctioneer

A person who conducts auctions by calling out prices and selling items to the highest bidder.

Estoppel

A legal principle that prevents a party from asserting a claim or right that contradicts what they have previously stated or agreed to by their actions.

Express Authority

Pertains to the power explicitly granted by one party to another, typically in writing, to perform specific acts or functions.