Nathan had a car that he acquired for $45,000 5 years ago. It was stolen in the current tax year, and insurance as a result gave Nathan $65,000 in compensation. Nathan, whose job was an industrial chemist, also entered into a restraint of trade with his ex-employer, Chemical Pty Ltd, to not work with any of their competitors for 3 years. Nathan was paid $300,000 for this (assume this did not constitute ordinary income and was also not assessable under s. 15-2). When the agreement lapsed it was not renewed.

Nathan had a car that he acquired for $45,000 5 years ago. It was stolen in the current tax year, and insurance as a result gave Nathan $65,000 in compensation. Nathan, whose job was an industrial chemist, also entered into a restraint of trade with his ex-employer, Chemical Pty Ltd, to not work with any of their competitors for 3 years. Nathan was paid $300,000 for this (assume this did not constitute ordinary income and was also not assessable under s. 15-2). When the agreement lapsed it was not renewed.

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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