Potomac LLC Purchased an Automobile for $30,000 on August 5

question 44

Multiple Choice

Potomac LLC purchased an automobile for $30,000 on August 5, 2019.What is Potomac's depreciation deduction for 2019? (Ignore any possible bonus depreciation.) (Use MACRS Table 1 and Exhibit 10-10.)

• A)$10,000.
• B)$4,287.
• C)$6,000.
• D)$30,000.
• E)None of the choices are correct.

---

Definitions:

Long-Term Investment

Investments held for an extended period, typically exceeding one year, such as stocks, bonds, or real estate, aiming for prolonged growth.

Fair Value

A valuation of an asset or liability determined by the price it would fetch if sold, or the cost to transfer it, in a smooth transaction among participants in the market.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the appropriate periods.

Debt Investments

Financial investments in debt instruments, such as bonds or mortgages, where the investor lends money to a borrower in exchange for interest payments.