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CIMAPRA19-F01-1 Exam - Topic 3 Question 55 Discussion

EF purchased an asset on 1 September 20X4 for $800,000, exclusive of import duties of $30,000. EF is resident in country Y where indexation is allowed on purchase costs when the asset is disposed of.EF sold the asset on 31 August 20X9 for $1,500,000 incurring transaction charges of $20,000. The indexation factor increased by 40% in the period from 1 September 20X4 to 31 August 20X9.Capital gains are taxed at 30%.What is the tax due on disposal of the asset?
D) $95,400
A) $108,000
B) $101,400
C) $102,600

CIMAPRA19-F01-1 Exam - Topic 3 Question 55 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam
Question #: 55
Topic #: 3
[All CIMAPRA19-F01-1 Questions]

EF purchased an asset on 1 September 20X4 for $800,000, exclusive of import duties of $30,000. EF is resident in country Y where indexation is allowed on purchase costs when the asset is disposed of.

EF sold the asset on 31 August 20X9 for $1,500,000 incurring transaction charges of $20,000. The indexation factor increased by 40% in the period from 1 September 20X4 to 31 August 20X9.

Capital gains are taxed at 30%.

What is the tax due on disposal of the asset?

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Suggested Answer: D

by Katina at Jul 21, 2022, 12:27 PM

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Myong
10 months ago
That sale price is impressive!
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Augustine
10 months ago
Wait, how does indexation even work in this case?
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Esteban
10 months ago
I disagree, it should be $102,600.
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Eun
11 months ago
I think the tax due is $108,000.
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Garry
11 months ago
The purchase cost was $830,000 after duties.
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Ammie
11 months ago
I’m leaning towards option C, but I really need to double-check my calculations on the indexed cost.
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Dahlia
11 months ago
If I recall correctly, we need to subtract the transaction charges from the selling price before calculating the gain.
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Barbra
11 months ago
I think the indexation factor increases the base cost, but I’m a bit confused about how to apply it here.
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Ciara
11 months ago
I remember we practiced a similar question about calculating capital gains tax, but I’m not sure about the indexation part.
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Jacinta
11 months ago
From what I remember, the main difference is that only internal analysts typically conduct the financial analysis of the health plan themselves, rather than relying on publicly available information like external analysts would.
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Desire
11 months ago
I'm feeling pretty confident about this one. The key is to identify the options that allow for automatic scaling based on the historical traffic data. The cloud monitor and event-triggered task approach seems like the most logical choice to me.
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Kallie
11 months ago
This seems like a tricky one. I'm not sure if I should go with enterprise modeling or interface modeling. I'll need to think this through carefully.
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