Question

Ana Cole is an employee of Wilson In-Home Healthcare Services. She is issued a company vehicle so that she may drive to customer sites. Required: Which of the general valuation rules would be appropriate to compute the value of the asset for any personal use? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

Answer 1

The general valuation rules would be appropriate to compute the value of the asset for any personal use are:

Cents-per-mile rule

Commuting rule

Lease value rule

Step-by-step explanation:

Cents-per-mile rule

When the firm uses cents per mile regulation, the cost of the car used as an individual is measured by calculating the cumulative number of miles used in the personal use by a regular IRS mileage (€ 0.58 per mile).

Commuting rule

Under this regulation, employees assess the value of an automobile offered to a worker with the use of a drive by multiplying per single-way path by $1.50. The advantage applies to every employee when more than one employee drives in the car.

Lease value rule

This method allows the owner to use the car's total lease importance — as defined in an IRS table based on the FMV of that same vehicle — multiplying the amount of personal miles from the total miles traveled by the employee.