CIMA Exam CIMAPRA19-F01-1 Topic 6 Question 99 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 99
Topic #: 6

[All CIMAPRA19-F01-1 Questions]

RS purchased an asset on 1 May 20X1 for $200,000, exclusive of import duties of $25,000.

The asset was sold on 1 December 20X3 for $450,000, incurring costs to sell of $15,000.

RS is resident in Country Y where indexation is allowable from the date of purchase to the date of sale.

The indexation factor increased by 40% in the period 1 May 20X1 to 1 December 20X3.

Capital gains are taxed at 25%.

What is the capital tax due from RS on disposal of the asset?

A$120,000

B$38,750

C$30,000

D$28,500

Show Suggested Answer

Suggested Answer: C

by Jettie at Sep 13, 2024, 05:48 AM

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Abel

5 months ago

Wait, did they mention if the asset was a unicorn? If so, I'm going with the answer that involves the most magical tax deductions.

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Cecilia

5 months ago

User 3: I think the answer is B) $38,750. Let's do the math to confirm.

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Freeman

5 months ago

I agree. Let's calculate the capital tax based on the provided details.

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Emmett

5 months ago

The asset was not mentioned as a unicorn, so we should stick to the given information.

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Francine

6 months ago

Whoa, hold up! Did you guys factor in the cost to sell the asset? That might throw a wrench in the works. Time to sharpen my pencil!

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Iluminada

6 months ago

I'm gonna have to go with D) $28,500. Anything to avoid paying that hefty capital gains tax, am I right?

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Latricia

5 months ago

I'm not sure, but I think D) $28,500 might be the correct answer. What do you think?

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Elza

5 months ago

I agree with you, B) $38,750 does seem like a good choice.

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Afton

5 months ago

I think I'll go with B) $38,750. It seems like the most reasonable option.

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Sherell

6 months ago

This seems straightforward. I'm going with C) $30,000. Gotta love those pesky import duties!

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Silvana

4 months ago

Looks like we're all in agreement then, C) $30,000 it is.

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Apolonia

5 months ago

Definitely, it's important to consider all the factors when calculating capital gains tax.

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Jerilyn

5 months ago

Yeah, the indexation factor and capital gains tax make it pretty clear.

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Candra

5 months ago

I think you're right, C) $30,000 sounds about right.

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Nieves

6 months ago

Hmm, I'm not sure about this one. The indexation factor increased by 40%, so that might impact the calculations.

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Elvis

5 months ago

Finally, we can apply the 25% tax rate to the capital gain to find the tax due.

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Beckie

5 months ago

After that, we can subtract the indexed cost from the selling price to get the capital gain.

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Yen

5 months ago

Yes, we should apply the 40% increase to the original cost.

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Lea

6 months ago

I think we need to calculate the indexed cost of the asset first.

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Keneth

6 months ago

I also believe the answer is B) $38,750, as the costs to sell should be deducted from the selling price before applying the indexation factor and tax rate.

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Bobbie

6 months ago

I agree with Trina, because the indexation factor increased by 40% which will reduce the capital gains and the tax due.

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Truman

6 months ago

I think the correct answer is B) $38,750. The question provides the necessary information to calculate the capital gains tax due.

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Mohammad

6 months ago

B) $38,750

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Oretha

6 months ago

A) $120,000

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Trina

6 months ago

I think the answer is B) $38,750.

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