Question
Aesthetics & Beauty Limited (ABL) is a skin treatment company operating in New Zealand. During the income year ended 31 March 2022, ABL sold a
Aesthetics & Beauty Limited (ABL) is a skin treatment company operating in New Zealand. During the income year ended 31 March 2022, ABL sold a LED facial machine in order to upgrade to the newer model. Given this particular machine was the only one available in New Zealand, the demand for the machine was very high and ABL was able to sell it for more than its original cost price.
The information relating to the sale is as follows (all amounts are GST-exclusive):
| Date | Amount $ | Details |
|---|---|---|
| 01.04.18 | 250,000 | ABL's original purchase price |
| 31.03.21 | 105,469 | Adjusted tax value |
| 26.09.21 | 295,000 | Sale proceeds received |
What is ABL's taxable income from the sale of the machine for the income year ended 31 March 2022?
| A. | $189,531. | |
| B. | nil. | |
| C. | $45,000. | |
| D. | $144,531. |
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Financial Accounting for Decision Makers
Authors: Peter Atrill, Eddie McLaney
6th Edition
273763451, 273763458, 978-0273763451
