Maxcom Inc. purchased 15 passenger automobiles for use by its sales force. Which of the following statements is true?
A. Even though Maxcom purchased the automobiles for business use, Maxcom is not allowed any tax depreciation for the automobiles.
B. Maxcom's annual tax depreciation on the passenger automobiles may be limited to an amount less than MACRS depreciation.
C. Maxcom must use the straight-line method to depreciate the passenger automobiles for tax purposes.
D. Maxcom's annual tax depreciation on the passenger automobiles is computed under MACRS.
Answer: B
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Williams Company computed its cost per equivalent unit for direct materials to be $2.60 and its cost per equivalent unit for conversion to be $3.75. A total of 250,000 units of product were completed and transferred out as finished goods during the month, and 36,000 of equivalent units remained unfinished at the end of the month. The amount that should be reported in Finished Goods Inventory is:
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