On 31 December 2014 an Aeroplane with a Cost of $200

question 29

Multiple Choice

On 31 December 2014 an aeroplane with a cost of $200 000 has had accumulated depreciation written off of $170 000. If it was sold for a profit of $30 000 on 1 January 2015 how much was recorded as income from the proceeds of the sale?

• A) $30 000
• B) $60 000
• C) Nil
• D) $200 000

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Definitions:

Negative Income Tax

A system where individuals earning below a certain amount receive supplemental pay from the government instead of paying taxes.

Tax Liability

The total amount of taxes an individual or organization owes to the tax authorities.

Income Subsidy

Financial assistance programs provided by governments or institutions to individuals or groups to help supplement their income, typically aimed at the needy or to promote certain economic activities.

After-Tax Income

The amount of net income left after all federal, state, and withholding taxes have been deducted from an individual's earnings.