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T uo pəip Jəuio ellery worth $500,000. The jeweller - in August 1990 at a cost of $40,00 p10 was $150,000. he money from his grandmother ar

T uo pəip Jəuio ellery worth $500,000. The jeweller - in August 1990 at a cost of $40,00 p10 was $150,000. he money from his grandmother ar

FINANCIAL ACCOUNTING
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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Accounting James's grandmother died on 1 November 2010 and, in her will, left James cash and jewellery worth $500,000. The jewellery had been bought by James's grandmother in August 1990 at a cost of $40,000, and its market value on 1 November 2010 was $150,000. James used the money from his grandmother and his savings to buy the following assets in January 2011: (a) an apartment in Melbourne (cost was $360,000 plus $20,000 legal fees and stamp duty), (b) a rare painting (cost was $50,000), and (c) 2,000 bank shares (cost was $20 per share, plus $200 brokerage). In 2020/21, James disposed of these assets as follows: (1) on 12 March 2021, he sold the apartment for $820,000 – he had lived in it all the time he owned it, (2) on 1 April 2021, the painting was stolen from his apartment – he received $50,000 compensation from his insurance company, (3) on 13 May 2021, James sold 1000 bank shares for $30 per share (brokerage cost $150), and (4) on 15 June 2021, he lost the jewellery, which wasn't insured, when he left his briefcase on a train. What are the CGT consequences of the sales?
Transcribed Image Text:Accounting James's grandmother died on 1 November 2010 and, in her will, left James cash and jewellery worth $500,000. The jewellery had been bought by James's grandmother in August 1990 at a cost of $40,000, and its market value on 1 November 2010 was $150,000. James used the money from his grandmother and his savings to buy the following assets in January 2011: (a) an apartment in Melbourne (cost was $360,000 plus $20,000 legal fees and stamp duty), (b) a rare painting (cost was $50,000), and (c) 2,000 bank shares (cost was $20 per share, plus $200 brokerage). In 2020/21, James disposed of these assets as follows: (1) on 12 March 2021, he sold the apartment for $820,000 – he had lived in it all the time he owned it, (2) on 1 April 2021, the painting was stolen from his apartment – he received $50,000 compensation from his insurance company, (3) on 13 May 2021, James sold 1000 bank shares for $30 per share (brokerage cost $150), and (4) on 15 June 2021, he lost the jewellery, which wasn't insured, when he left his briefcase on a train. What are the CGT consequences of the sales?
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