A motor car which was purchased for 20,000 had its book value 12,000. It was sold for 25,000.
The capital profits will be ___________.

5,000

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8,000

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13,000

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25,000

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Solution

The correct option is A 5,000
Capital profit is a capital gain which is arise from the sale of capital asset such as stock, bond,real estate etc.

When the asset is sold at a price which exceeds the purchase price the profit is capital profit.

Capital Profits = Sales value - Purchase price
= Rs 25000 - Rs 20000
= Rs 5000

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A motor car which was purchased for 20,000 had its book value 12,000. It was sold for 25,000. The capital profits will be ___________.

A motor car which was purchased for 20,000 had its book value 12,000. It was sold for 25,000.
The capital profits will be ___________.