Problem:
PDT operates in the tax jurisdiction of F-land where the currency is the F$. During the year, PDT sells a machine with a carrying amount of F$25,000 for F$28,000. The tax base for the machine is F$29,000. There are no annual exemptions, no indexation allowances and no additional costs of sale or purchase. What is the correct adjustment to the accounting profit in relation to the sale of the machine? Solution A.F$1,000 balancing charge. B.F$3,000 balancing charge. C.F$1,000 balancing allowance. D.F$3,000 balancing allowance.