Roger, an Individual, Owns a Proprietorship Called Green Thing

question 32

Essay

Roger, an individual, owns a proprietorship called Green Thing. For the year 2018, Roger has the following items:
? Business income-$200,000.
? Business expense-$150,000.
? Loss on a completely destroyed business machine. The machine had an adjusted basis of $25,000 and a fair market value of $20,000.
? Loss on a business truck. The truck had an adjusted basis of $8,000. The repairs to fix the truck cost $10,000. Determine Roger's adjusted gross income for 2018.

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Definitions:

FASB

The Financial Accounting Standards Board, an independent organization responsible for establishing accounting and financial reporting standards in the United States.

Depreciation Method

A systematic approach used to allocate the cost of a tangible asset over its useful life.

Units-Of-Production Depreciation

A depreciation method where the expense is based on actual usage or production levels, rather than time.

Total Depreciable Cost

The total depreciable cost is the cost of a fixed asset minus its salvage value, representing the total amount that can be depreciated over the asset's useful life.