Seaworthy Inc. (Seaworthy) is a manufacturing business. In January 2019, Seaworthy sold a piece of undeveloped...
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Seaworthy Inc. (Seaworthy) is a manufacturing business. In January 2019, Seaworthy sold a piece of undeveloped land for $1,250,000. This land had been purchased in 201 for $1,000,000 with the intent of constructing a warehouse for the assembly and storag of inventory. Seaworthy was NOT able to build the warehouse as planned and gladly accepted an offer to purchase and sell the land. The buyer provided an initial down payment of $187,500 at the time of sale, with the remaining balance to be paid in 2020 and 2021 in two equal instalments of $531,250. Required: Determine the minimum amount of capital gain that Seaworthy must include in income for the 2019 and 2020 taxation years. (5 marks) Seaworthy Inc. (Seaworthy) is a manufacturing business. In January 2019, Seaworthy sold a piece of undeveloped land for $1,250,000. This land had been purchased in 201 for $1,000,000 with the intent of constructing a warehouse for the assembly and storag of inventory. Seaworthy was NOT able to build the warehouse as planned and gladly accepted an offer to purchase and sell the land. The buyer provided an initial down payment of $187,500 at the time of sale, with the remaining balance to be paid in 2020 and 2021 in two equal instalments of $531,250. Required: Determine the minimum amount of capital gain that Seaworthy must include in income for the 2019 and 2020 taxation years. (5 marks)
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To determine the minimum amount of capital gain that Seaworthy must include in income for the 2019 and 2020 taxation years we need to calculate the ad... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I
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