Part 1 PTI Inc., located in a country which has a capital gains tax, conducted the following transactions: a. Purchased a building in February 2018 for $26,000,000. In March 2019, the company spent $2, 800,000 to install solar panels for electricity in the building. Th building was sold for $40,000,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,200,000. b. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was sold in 2021 for $4.5 million. c. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021 for 1 million. d. Purchased a government bond for $5,000,000. The company is entitled to Annual Exemption of $500,000. Capital losses as at 1 January 2021 was $7,500,000. Calculate the capital gains tax in 2021, assuming a capital gains tax of 20%.

Part 1 PTI Inc., located in a country which has a capital gains tax, conducted the following transactions: a. Purchased a building in February 2018 for $26,000,000. In March 2019, the company spent $2, 800,000 to install solar panels for electricity in the building. Th building was sold for $40,000,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,200,000. b. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was sold in 2021 for $4.5 million. c. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021 for 1 million. d. Purchased a government bond for $5,000,000. The company is entitled to Annual Exemption of $500,000. Capital losses as at 1 January 2021 was $7,500,000. Calculate the capital gains tax in 2021, assuming a capital gains tax of 20%.

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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