7. In addition to his business as construction materials dealer, Henlin has the following capital assets transaction in 2011: Capital Capital gain (loss) P 69,000 Date Date Selling Sold Selling Price Acquired P80,000 Expenses P 1,000 Asset Cost 3/15/2011 M. Benz Car 05/16/2011 400,000 Refrigerator 09/05/2011 6,000 12/05/2011 12,000 05/10/2008 P10,000 07/15/2009 02/09/2011 01/10/2011 Jewelry 350,000 20,000 30,000 5,000 1,000 Ford car 20,500 (8,500) The net capital gain of Henlin in 2011 is : a. P27.000 b. P76.500 c. P42.000 d. P26.500

Q: What is working capital?   Thanks

A: Meaning: Working capital is nothing but a company’s cash used for day-to-day activities. The main…

Q: What is the notion of capitalization effects and how does it work

A: The notion of capitalization effects and how does it work will be explained:

Q: What is issued capital? How does it differ from Authorized capital?

A: Company needs the funds for business purpose. Hence, Company raise capital.

Q: A) What is cost of capital? What does it represent?   B)  Why is it important to estimate cost of…

A: Sources of Finance means from where a business or firm is taking money in order to fund out its…

Q: Why should the capital expenditures be capitalized?

A: Capital Expenditures:   Capital expenditures are those which provide future economic benefits by…

Q: Define capital gain (loss)

A: Whenever an asset is sold, the seller incurs either a profit or a loss. The asset may be a real…

Q: When should the investment in working capital be treated as capital expenditure?

A: Working capital:   It is the form of capital used by the business for day-to-day operations. Working…

Q: discuss the advantages and disadvantages of using return on capital employed ?

A: We have to find the advantages and disadvantages of using return on capital employed (ROCE).

Q: What is the actual cost of capital to the borrower?

A: The cost of capital to the borrower is the weighted average cost of capital from all sources of…

Q: What is working capital? How does working capitalrelate to the operating cycle?

A: Working capital: Working capital refers to the excess amount of current assets over its current…

Q: How can capital gains and losses be offset against each other?

A: Capital gains and losses refer to the financial gains or losses that result from the sale or…

Q: Define signaling theory (capital structure)

A: Capital structure: Capital structure is defined as mixture or proportion of all kinds of capital…

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.