A Flood Damaged an Auto Owned by Mr

question 9

Multiple Choice

A flood damaged an auto owned by Mr.and Mrs.South on June 15 of this year.The car was only used for personal purposes. Based on these facts,what is the amount of the South's casualty loss deduction after limitations for this year?

• A)$900
• B)$1,000
• C)$4,400
• D)$4,500

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Definitions:

Percent of Sales Method

A financial forecasting model that estimates certain balance sheet and income statement accounts as a percentage of projected sales.

Bad Debt Expense

The amount of receivables that a company estimates it will not collect.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income.

Allowance Method

The allowance method is an accounting technique used to estimate and account for potential credit losses on accounts receivable, recognizing them as an expense before they occur.