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Tobo company buys and sells computers. any gains from the sale of the computer are ______gains.

a. a capital
b. ordinary

User DuduArbel
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1 Answer

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Final answer:

The gains from the sale of the computer by the Tobo company are capital gains, which refer to the profits made from the sale of assets that are not part of the company's regular business operations. The correct answer is a. a capital.

Step-by-step explanation:

The gains from the sale of the computer by the Tobo company are a capital gains. Capital gains refer to the profits made from the sale of assets, such as computers, which are not part of the company's regular business operations. This type of gain is subject to different tax treatment compared to ordinary gains.

When Tobo Company sells computers, any gains from the sale are considered ordinary gains, as they result from the company's regular business operations of buying and selling computers. It's not a capital gain, which typically arises from the sale of an investment or fixed asset.

If Tobo Company sells the computers for $500, to determine if it is making a profit or loss, we would need to know the company's cost to acquire or produce a computer.

If the cost is lower than $500, the company makes a profit; if higher, it incurs a loss.

User David Dayag
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