Monica's Lawn Service, Inc

question 118

Multiple Choice

Monica's Lawn Service, Inc., purchases a heavy-duty tri-cut lawn mower on March 17, 2014, for $4,500. The depreciation on the lawn mower in 2014 was $500. In July, a tire on the lawn mower is repaired at a cost of $650. Maintenance costs on the lawn mower for 2014 total $175. What is Monica's basis in the lawn mower at the end of 2014?

• A) $ 650
• B) $4,000
• C) $4,650
• D) $5,150
• E) $5,325

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Definitions:

Parent Company

A corporation that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors.

Business-Format Franchising

A franchising arrangement where the franchisee is given not just the rights to sell a product or service, but also the detailed method to conduct the business.

Product-Distribution

Product-distribution involves the process of making a product or service available for the consumer or business user that needs it, which can include warehousing, logistics, and retailing.

Geographic Region

An area defined by physical, natural, human, or cultural characteristics that distinguish it from other areas.