John, an Australian Resident, sold the following assets: Item Purchase Price Sale Price Motor Bike 15,000 86,000 Valuable Painting 190,000 312,000 Dinner Table 26,000 14,000 Lounge furniture 8,000 11,000 Antique Statue 31,000 21,000 Rental Apartment 590,000 660,000 All assets were purchased on 1 October 2017 and sold on 30 June 2019. Required: Calculate the total amount to be included in John's assessable income, if any, from these CGT events?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
John, an Australian Resident, sold the following assets:
| Item | Purchase Price | Sale Price | |
| Motor Bike | 15,000 | 86,000 | |
| Valuable Painting | 190,000 | 312,000 | |
| Dinner Table | 26,000 | 14,000 | |
| Lounge furniture | 8,000 | 11,000 | |
| Antique Statue | 31,000 | 21,000 | |
| Rental Apartment | 590,000 | 660,000 |
All assets were purchased on 1 October 2017 and sold on 30 June 2019.
Required:
Calculate the total amount to be included in John's assessable income, if any, from these CGT events?
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