Sid Slaw purchased a car three years ago that he used for both private and business purposes (he is a freelance journalist). Sid bought the vehicle for $40,000 and made an initial input tax claim of $4,173.91 out of the $5,218 GST paid. After a year, Sid realised he had overestimated his business use proportion and made an output tax adjustment of $2,086.95. Sid has just sold the car for $12,000. Calculate the net amount of GST Sid should return to the IRD upon sale of the car?
Sid Slaw purchased a car three years ago that he used for both private and business purposes (he is a freelance journalist). Sid bought the vehicle for $40,000 and made an initial input tax claim of $4,173.91 out of the $5,218 GST paid. After a year, Sid realised he had overestimated his business use proportion and made an output tax adjustment of $2,086.95. Sid has just sold the car for $12,000. Calculate the net amount of GST Sid should return to the IRD upon sale of the car?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sid Slaw purchased a car three years ago that he used for both private and business purposes (he is a freelance journalist). Sid bought the vehicle for $40,000 and made an initial input tax claim of $4,173.91 out of the $5,218 GST paid. After a year, Sid realised he had overestimated his business use proportion and made an output tax adjustment of $2,086.95.
Sid has just sold the car for $12,000. Calculate the net amount of GST Sid should return to the IRD upon sale of the car?
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