25. Mike's Bikes begins business in 2022. In its first year of business, Mike sells 500 bicycles. On the company's 2022 income statement, the company reports warrantee expense of $100. On the company's 2022 balance sheet, the company reports warrantee liability of $30. In 2022, how much did Mike spend fixing bicycles that were under warrantee?

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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.