1. Josh is a builder and helping Greg at weekend to build his shed, Greg promised Josh to give him his old caravan (which cost him $12,000 on 1’st July 2000 when he bought it). Assume the shed was done on 1’st July 2020 when Greg handed over the Caravan to Josh. (Assume the value of Josh’s works was for $15,000, and the market value of the caravan was for $16,000) Discuss whether Josh needs to declare it as an ordinary income or not?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1. Josh is a builder and helping Greg at weekend to build his shed, Greg promised Josh
to give him his old caravan (which cost him $12,000 on 1’st July 2000 when he bought
it). Assume the shed was done on 1’st July 2020 when Greg handed over the Caravan
to Josh. (Assume the value of Josh’s works was for $15,000, and the market value of
the caravan was for $16,000)
Discuss whether Josh needs to declare it as an ordinary income or not?

 

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