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 are the different factors affecting the requirements of working capital? Enumerate.

A: Working Capital- It is the fund that is required by a company for managing its day -to-day working…

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 are the ramifications of having Working Capital?

A: The Ramifications Of Having Working Capital Will Be Explained:

Q: What is the meaning of capital costs, how are they described, and how are they different from…

A: Capital costs are one-time expenses for the creation, improvement, or purchase of assets like…

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: Explain what is capital or capital financing? Examples

A: capital financing is the form of business finance that is raised through equity funds and lenders…

Q: What do you understand by Financial Capital ? What is the difference between Financial capital and…

A: The Answer

Q: How do we get the weighted average cost of capital if not given in the question?

A:

Q: What are some of the factors that inform the cost of capital?

A: The cost of capital represents the return expected by providers of capital (both debt and equity) to…

Q: What is Capital, Capitalization and Capital Structure in your own words.

A: Entrepreneurs use startup capital to cover any or all of the costs associated with starting a new…

Q: Net working capital formula?

A: Net working capital is the difference between the current assets and current liabilities. It is the…

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: What is the capital components. breifly define.

A: Introduction: The Weighted Average Cost of Capital (WACC) of a company shows its overall cost of…

Q: What is the weighted average cost of capital?

A: The formula to compute weighted average cost of capital as follows:

Q: Does weighted average cost of capital is similar to Cost of Capital?

A: Cost of capital refers to the return expected by the company for making investments in projects or…

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: How did the term working capital originate?

A: Introduction: Working capital can be defined as the necessary financial resources needed by a firm…

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: Cost of Capital depends on its components and cost associated with its components’. Justify the…

A: The cost of capital repersent of company repersent its cost of financing. It referes to minimum rate…

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: What is net worth or shareholders’ net worth?

A: The stock holder’s net worth or net worth is the difference between total assets and liabilities of…

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.