Parker Bought a Brand New Ferrari on January 1, 2017

question 16

True/False

Parker bought a brand new Ferrari on January 1, 2017, for $125,000. Parker was fatally injured in an auto accident on June 23, 2017, when the fair market value of the car was $105,000. Parker was driving a loaner car from the Ferrari dealership while his car was being serviced. In his will, Parker left the Ferrari to his best friend, Ryan. Ryan's holding period for the Ferrari begins on January 1, 2017.

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Definitions:

Residual Value

The approximate worth of an asset when it reaches the end of its usable life.

Depreciable Cost

This refers to the total cost of an asset that is subject to depreciation over its useful life, including the purchase price and any additional costs necessary to make the asset usable.

Journal Entry

A record of a transaction in the general journal, indicating the accounts and amounts to be debited and credited.

Hours

A measure of time spent performing tasks or activities, often used in work, scheduling, and billing contexts.