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CIMAPRA19-F01-1 Exam - Topic 1 Question 121 Discussion

An entity bought a capital item for $110,000 on 1 March 20X4 incurring legal fees at the date of purchase of $2,500.On 1 May 20X4 additional costs classified as capital expenditure by the tax rules of the country of $25,000 were incurred in respect of the asset. On 1 June 20X4 repairs not classified as capital expenditure were incurred at a cost of $15,000.The asset was sold for $250,000 on 30 November 20X8 and costs to sell were incurred of $4,300.Calculate the chargeable gain on the disposal.Give your answer to the nearest $.
A) $108200

CIMAPRA19-F01-1 Exam - Topic 1 Question 121 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam
Question #: 121
Topic #: 1
[All CIMAPRA19-F01-1 Questions]

An entity bought a capital item for $110,000 on 1 March 20X4 incurring legal fees at the date of purchase of $2,500.

On 1 May 20X4 additional costs classified as capital expenditure by the tax rules of the country of $25,000 were incurred in respect of the asset. On 1 June 20X4 repairs not classified as capital expenditure were incurred at a cost of $15,000.

The asset was sold for $250,000 on 30 November 20X8 and costs to sell were incurred of $4,300.

Calculate the chargeable gain on the disposal.

Give your answer to the nearest $.

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Suggested Answer: A

by Izetta at Jan 27, 2026, 08:33 PM

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Shelton
1 month ago
Right! So, total costs are $110,000 + $2,500 + $25,000 - $15,000. Let’s do the math!
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Lucy
1 month ago
I think the chargeable gain is calculated by subtracting total costs from the sale price.
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Laurel
1 month ago
Agreed! Legal fees and additional costs count, but repairs don’t.
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Annelle
2 months ago
This question is tricky! I need to remember the capital vs. non-capital costs.
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Carlota
2 months ago
Not sure about those numbers, feels a bit off.
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Brice
2 months ago
Totally agree, that gain is impressive!
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Lillian
4 months ago
Wait, are repairs really not capitalized? Seems odd.
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Alonso
4 months ago
Selling price minus total cost gives a gain of $108,200!
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Irving
4 months ago
Total cost of the asset is $137,500 after all capital expenditures.
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Leila
4 months ago
Ah, the joys of capital gains calculations. At least it's not as complicated as quantum physics, right?
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Brianne
4 months ago
This is easy peasy. Just add up the costs and subtract from the sale price. Simple math, folks!
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Arlen
4 months ago
Wait, did they factor in the cost to sell? I'd better recheck the numbers.
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Angella
5 months ago
$108,200? That's a nice chunk of change! Time to treat myself to a fancy dinner.
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Veta
5 months ago
Hmm, I wonder if the repairs should be included in the cost basis. Better review the tax rules on that.
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Fidelia
5 months ago
Looks like a straightforward capital gains calculation. I'd double-check the dates and amounts, but the answer seems right.
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Twila
5 months ago
The chargeable gain on the disposal is $108,200.
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Roselle
5 months ago
From what I remember, the selling price minus the total costs gives us the gain, but I need to double-check how to handle the legal fees and additional costs correctly.
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Sharan
5 months ago
I believe the additional costs incurred in May should be added to the asset's cost, but I'm a bit confused about how to treat the repairs from June.
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Aleisha
6 months ago
I think we practiced a similar question where we had to determine the chargeable gain, but I can't recall if we included the selling costs in the final calculation.
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Haley
6 months ago
I remember we discussed how to calculate the initial cost of the asset, including legal fees, but I'm not sure if I should include the repairs in the calculation.
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Rana
7 months ago
The timing of the different costs is going to be important here. I'll need to make sure I'm applying the right treatment for each item in the correct accounting period.
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Cathern
7 months ago
This is a good test of my understanding of capital gains. I'm confident I can work through this step-by-step and get the right answer.
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Dick
7 months ago
Okay, I think I've got a plan. I'll calculate the total cost basis, including the purchase price, legal fees, and additional capital expenditures. Then I'll subtract that from the sale price and deduct the selling costs to get the chargeable gain.
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Ahmed
7 months ago
Hmm, I'm a bit unsure about how to handle the different types of expenditures and when they occurred. I'll need to review the rules on capital vs. revenue expenditures.
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Latanya
7 months ago
This looks like a straightforward capital gains calculation, but I'll need to be careful to account for all the different costs and dates.
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Arlette
19 days ago
And remember, repairs don’t count as capital expenditure!
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Marquetta
24 days ago
Right! The legal fees and additional costs matter a lot.
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Lettie
29 days ago
Sounds tricky! Don't forget to include all the capital costs.
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