During 2019, John Ritton sells a capital asset with an adjusted cost base of $126,000 for proceeds of disposition that total $182,000. He provides the purchaser with a one year warranty that he estimates will cost $2,600 to provide. During 2020, he spends $2,400 to fulfill the warranty provision. Determine the effect of these transactions on Net Income For Tax Purposes for 2019 and 2020.

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The Answer of During 2019, John Ritton sells a capital asset with an adjusted cost base of $126,000 for proceeds of disposition that total $182,000. He provides the purchaser with a one year warranty that he estimates will cost $2,600 to provide. During 2020, he spends $2,400 to fulfill the warranty provision. Determine the effect of these transactions on Net Income For Tax Purposes for 2019 and 2020.

During 2019, John Ritton Sells a Capital Asset with an Adjusted