Tax question. please see the attachment below. Ajay Ltd purchased a depreciating asset with the value of $5,000 on 31 March 1989. On thesame day, the company paid $50 to transfer the ownership. One year after, on 31 March1990, this company spent an additional $1,500 for the asset functionality improvement. Later,on 31 March 1992, the company moved to a new place, and paid $200 to transfer this assetto the new location of business. Finally, the asset was sold in 2020 for $12,000 (Ignore GSTeffect in all calculations of this question).Calculate cost base, and capital gain (Loss), and capital gain tax, if any, considering Ajaydecided to index (if applicable) and the relevant corporate tax rate is 30%.

Capital gain/loss are the profits or rains arising from the transfer of a capital asset. It is the…

Answered: Calculate cost base, and capital gain…

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Calculate cost base, and capital gain (Loss), and capital gain tax, i

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 7E: Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for...

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Question

Tax question.

please see the attachment below.

Ajay Ltd purchased a depreciating asset with the value of $5,000 on 31 March 1989. On the
same day, the company paid $50 to transfer the ownership. One year after, on 31 March
1990, this company spent an additional $1,500 for the asset functionality improvement. Later,
on 31 March 1992, the company moved to a new place, and paid $200 to transfer this asset
to the new location of business. Finally, the asset was sold in 2020 for $12,000 (Ignore GST
effect in all calculations of this question).
Calculate cost base, and capital gain (Loss), and capital gain tax, if any, considering Ajay
decided to index (if applicable) and the relevant corporate tax rate is 30%.

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