Kelley was born on 5 October 1984 in Lima. During the current year of assessment, she sold her holiday home for R7 000 000. The selling price includes state agent commission of R700 000 paid to the estate agents. Kelley agreed to repay the purchaser R2 200 000 once the transaction is complete. The transaction was completed before the year of assessment. YOU ARE REQUIRED to determine the proceeds.a.R7 000 000b.R4 800 000c.R6 300 000d.R2 200 000
Question
Kelley was born on 5 October 1984 in Lima. During the current year of assessment, she sold her holiday home for R7 000 000. The selling price includes state agent commission of R700 000 paid to the estate agents. Kelley agreed to repay the purchaser R2 200 000 once the transaction is complete. The transaction was completed before the year of assessment. YOU ARE REQUIRED to determine the proceeds.a.R7 000 000b.R4 800 000c.R6 300 000d.R2 200 000
Solution
The proceeds from the sale of the holiday home would be calculated by taking the selling price and subtracting any costs associated with the sale and any amounts that Kelley agreed to repay to the purchaser.
Step 1: Start with the selling price The selling price of the home is R7 000 000.
Step 2: Subtract the estate agent commission Kelley paid R700 000 in commission to the estate agents. So, R7 000 000 - R700 000 = R6 300 000.
Step 3: Subtract the amount Kelley agreed to repay to the purchaser Kelley agreed to repay the purchaser R2 200 000. So, R6 300 000 - R2 200 000 = R4 100 000.
Therefore, the proceeds from the sale of the holiday home would be R4 100 000. However, this option is not listed in the choices provided. It seems there might be a mistake in the question or the provided choices.
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