Hemant Ltd, carries on a manufacturing business and had a number of transactions for the current tax year ended 30 June relevant to calculating its ordinary income:received $100 000 as compensation for the loss of trading stock due to flooding in its business premises;received $300 000 for the outright sale of a patent/copyright for a product it no longer manufactures;received $400 000 from the sale of its manufactured goods to a retailer.Based on this information what amount of ordinary income will Hemant Ltd have for the current tax year ended 30 June? a.$100,000 b.$300,000 c.$700,000 d.$500,000

Ordinary income is that income that usually arises in the normal course of business and it does not…

Answered: Hemant Ltd, carries on a manufacturing…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hemant Ltd, carries on a manufacturing business and had a number of transactions for the current tax year ended 30 June relevant to calculating its ordinary income:

received $100 000 as compensation for the loss of trading stock due to flooding in its business premises;
received $300 000 for the outright sale of a patent/copyright for a product it no longer manufactures;
received $400 000 from the sale of its manufactured goods to a retailer.

Based on this information what amount of ordinary income will Hemant Ltd have for the current tax year ended 30 June?

	a.	$100,000
	b.	$300,000
	c.	$700,000
	d.	$500,000

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