Jarvie loves to bike in fact he has always turned down, Cost Accounting

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Jarvie loves to bike in fact he has always turned down

Jarvie loves to bike. In fact, he has always turned down better paying jobs to work in bicycle shops where he gets an employee discount. At Jarvie’s current shop, Bad Dog Cycles, each employee is allowed to purchase four bicycles a year at a discount. Bad Dog has an average gross profit percentage on bicycles of 25 percent. During the current year, Jarvie bought the following bikes:

Description Retail Price Cost Employee

Price

Specialized road bike $5,800 $4,100 $4,060

Rocky Mountain mountain bike 8,400 6,800 6,720

Trek road bike 4,400 3,320 3,080

Yeti mountain bike 5,300 4,890 4,240

a.What amount is Jarvie required to include in taxable income from these purchases?

b.What amount of deductions is Bad Dog allowed to claim from these transactions?

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Cost Accounting: Jarvie loves to bike in fact he has always turned down

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Cost Accounting: Jarvie loves to bike in fact he has always turned down

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Cost Accounting: Jarvie loves to bike in fact he has always turned down

Reference No:- TGS0653327

Recent Questions Asked Cost Accounting

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