Thabitha works for Lobatse Clayworks Limited, a company that specializes in manufacturing ceramic products as well as special heat resistant face bricks used mainly in industrial processes. During the financial year ended 31 December 2022, she received amounts as shown below:A company vehicle for private use with a value of P480,000 with annual running costs of P18,000 paid by the companyTickets and booking to the value of P15,000 to go on her annual holiday as part of her condition of employment.Received free meals for P7,500 during the year from the company canteenRefund of P5,000 for medical expenses from Pula Medical Aid Society, her medical aid providerDividends of P12,550 for shares held in a local company.Won a Jackpot of P50,500 from Cumberland CasinoShare option offer from employer of 10,800 shares in the company at a price of P1.80 each, the current market price of the shares is P2.30 eachReceived a subsidy of P125,000 from government programme for Horticultural farming for use at her farm.A tenant at her business plot in Woodhall Industrial effected some improvements worth P12,000 at the plot. The lease agreement had stipulated that the tenant may effect improvement for P10,000 only.Sold her personal car for P80,000 which she had bought the previous year for P30,000 at an auction.RequirementsIndicate giving reasons whether each of the above amounts should be included in the gross income for Thabitha.

In the given scenario, we are presented with various amounts received by Thabitha, and we need to…

Answered: Requirements Indicate giving reasons…

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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Thabitha works for Lobatse Clayworks Limited, a company that specializes in manufacturing ceramic products as well as special heat resistant face bricks used mainly in industrial processes. During the financial year ended 31 December 2022, she received amounts as shown below:
A company vehicle for private use with a value of P480,000 with annual running costs of P18,000 paid by the company
Tickets and booking to the value of P15,000 to go on her annual holiday as part of her condition of employment.

Received free meals for P7,500 during the year from the company canteen

Refund of P5,000 for medical expenses from Pula Medical Aid Society, her medical aid provider
Dividends of P12,550 for shares held in a local company.
Won a Jackpot of P50,500 from Cumberland Casino

Share option offer from employer of 10,800 shares in the company at a price of P1.80 each, the current market price of the shares is P2.30 each
Received a subsidy of P125,000 from government programme for Horticultural farming for use at her farm.

A tenant at her business plot in Woodhall Industrial effected some improvements worth P12,000 at the plot. The lease agreement had stipulated that the tenant may effect improvement for P10,000 only.
Sold her personal car for P80,000 which she had bought the previous year for P30,000 at an auction.

Requirements

Indicate giving reasons whether each of the above amounts should be included in the gross income for Thabitha.

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