Nkosi is 64 years old. During the current year of assessment, he sold a pre- valuation date value asset for R7 600 000.Included in the amount is the agent's commission who he had paid for getting a buyer for him. The commission is 5% ofthe selling price. The valuation date value of the asset was correctly calculated to be R3 440 000. Just before the assetwas sold Nkosi incurred improvement costs worth R1 000 000 to increase his chance of being able to sell the asset. YOUARE REQUIRED to determine the base cost of the asset. Select one: a. R3 440 000 b. R4 820 000 c. R4 440 000 d. R3 820 000

The base cost of an asset refers to its original value for tax calculation purposes. It includes the…

Answered: ARE REQUIRED to determine the base cost…

ARE REQUIRED to determine the base cost of the asset. Select one: a. R3 440 000 b. R4 820 000 c. R4 440 000 d. R 3 820 000

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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Question

Nkosi is 64 years old. During the current year of assessment, he sold a pre- valuation date value asset for R7 600 000.
Included in the amount is the agent's commission who he had paid for getting a buyer for him. The commission is 5% of
the selling price. The valuation date value of the asset was correctly calculated to be R3 440 000. Just before the asset
was sold Nkosi incurred improvement costs worth R1 000 000 to increase his chance of being able to sell the asset. YOU
ARE REQUIRED to determine the base cost of the asset. Select one: a. R3 440 000 b. R4 820 000 c. R4 440 000 d. R
3 820 000

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