A company issued a P3,000,000, 6-year bonds dated January 1, 2021, with a stated interest rate of 11%. Interest on the bonds is payable annually every December 31 of each year. The company's bonds were sold to yield 14%. On May 1, 2022, the company retired P 1,000,000 face value bonds at 101. How much is the carrying value of the bonds on December 31, 2022? A company sells washing machines that carry a three-year warranty against manufacturer's defects. Based on company experience, warranty costs were estimated at P300 per machine. During 2021, Bill sold 24,000 washing machines and paid warranty costs of P1,700,000. In its profit or loss statement for the year ended December 31, 2021, the company should report warranty expense of

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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.