(c) The transaction on June 30, 2024, shows the company purchased a patent for $53,000 from a third-party marketing company. Suppose the company instead spent $53,000 to internally develop the new packaging technology, which it then patented. Calculate the difference in net income and total assets for 2024 (ignoring tax effects). Additional expense for 2024 The income and total assets in 2024 would have been higher. (True or False) $ False 0x >
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![(c) The transaction on June 30, 2024, shows the company purchased a patent for $53,000 from a third-party marketing company.
Suppose the company instead spent $53,000 to internally develop the new packaging technology, which it then patented. Calculate
the difference in net income and total assets for 2024 (ignoring tax effects).
Additional expense for 2024
The income and total assets in 2024 would have been higher. (True or False)
$
False
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- 2Part BPTI Inc., located in a country which has a capital gains tax, conducted the followingtransactions:a. Purchased a building in February 2018 for $26,000,000. In March 2019, thecompany spent $2, 800,000 to install solar panels for electricity in the building. Thebuilding was sold for $40,000,000 in 2021. The annual maintenance cost was$500,000. The cost of advertising the sale of the building and the legal feesamounted to $1,200,000.b. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle wassold in 2021 for $4.5 million.c. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021for 1 million.d. Purchased a Government bond for $5,000,000.The company is entitled to Annual Exemption of $500,000. Capital losses as at 1 January2021 was $7,500,000.Required:Calculate the capital gains tax in 2021, assuming a capital gains tax of 20%1. On November 4, 2020, GT Corporation sells a piece of its equipment. GT Corporation had initially purchased the equipment for $350,000. The company had recorded $230,000 in depreciation for this piece of equipment as of the date of sale. If GT Corporation receive $150,000 cash when they sell the equipment, they will report a November 2020 Income Statement; if they instead receive $100,000 cash when they sell the equipment, they will on their report a a. $150,000 gain; $100,000 gain. b. $80,000 gain; $130,000 loss. c. $30,000 loss; $20,000 gain. d. $30,000 gain; $20,000 loss.A company resident in Jamaica purchased the following assets in 2021: Asset Cost $ Honda Motor car purchased in March 2020 38,000 Heavy Equipment 50,000 Computer (CPU) 4,000 Factory Buildings 72,000 (a) What would be the difference in capital allowances for 2022 if this company were resident in Trinidad and Tobago instead of Jamaica for tax purposes. (b) List two circumstances in which obtaining capital allowances on the reducing balance basis is more beneficial than on the straight-line basis.
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