Warren purchased a new harvester for his farm on 1 July 2016 for $180 000. He...
Warren purchased a new harvester for his farm on 1 July 2016 for $180 000. He uses the tractor entirely for business purposes and it has an effective life of 12 years. He is choosing to use the diminishing value method of depreciation. What amount should Warren claim as an allowable deduction (to the nearest $1) under Division 40 for the year ended 30 June 2018? 1) $19 687 2) $25 000 3) Nil 4) $30,000 5) $15 000
Homework Answers
Division 40 is depreciation of plant and equipment. Depreciation
rate determined by life of asset & this rate applied on opening
balance.
Add Answer to:
Warren purchased a new harvester for his farm on 1 July 2016 for
$180 000. He...
Question 2: (16 marks) Wastewater Ltd acquired an item of plant on 1 July 2016 for...
Question 2: (16 marks) Wastewater Ltd acquired an item of plant on 1 July 2016 for $3 660 000. When the item of plant was acquired, it was initially assessed as having a life of 10000 hours. During the reporting period ending 30 June 2017 the plant was operated for 3000 hours. At 1 July 2017 the plant had a remaining useful life of 7000 hours. On 1 July 2017 the plant underwent a major upgrade costing $234 600. Management...
Phipps Car Rentals Ltd commenced operations on 1 July 2016. At this time it purchased 4...
Phipps Car Rentals Ltd commenced operations on 1 July 2016. At
this time it purchased 4 cars at a cost of $30,000
each, and proceeded to rent these on a short-term basis to
people visiting Canberra. Accounting operating profit before tax
was as follows:
2016/7
$250,000
2017/8
$350,000
2018/9
$450,000
For taxation purposes the cars are
depreciable at 15% p.a. whilst for accounting purposes
they a depreciable at 10% p.a., both straight
line. The tax rate for the years 2016/7...
Part a Donahue Ltd purchased a plant on 1 July 2018 for N$300 000. The entity...
Part a Donahue Ltd purchased a plant on 1 July 2018 for N$300 000. The entity incurred transfer fees of N$90 000. The expected dismantling cost at the end of the useful life of the plant is N$200 000. The applicable discount rate after tax (tax rate 25.75%) 6.3% Useful life 12 years The plant is erected on rented premises and the rental agreement requires dismantling of the plant at the end of its useful life. Assume that Inland Revenue...
Gleim 6 Deductions from AGI [1] Which one of the following expenses does not qualify as...
Gleim 6 Deductions from AGI [1] Which one of the following expenses does not qualify as a deductible medical expense? A. Cost of long-term care for a developmentally disabled person in a relative’s home. B. Special school for a deaf child to learn lip reading. C. Cost of elevator installed for individual who had heart bypass surgery (in excess of increase in value of individual’s home). D. Cost and care of guide dogs used by a blind person in his...
Question 2: (16 marks) Wastewater Ltd acquired an item of plant on 1 July 2016 for $3 660 000. When the item of plant was acquired, it was initially assessed as having a life of 10000 hours. During the reporting period ending 30 June 2017 the plant was operated for 3000 hours. At 1 July 2017 the plant had a remaining useful life of 7000 hours. On 1 July 2017 the plant underwent a major upgrade costing $234 600. Management...
Phipps Car Rentals Ltd commenced operations on 1 July 2016. At
this time it purchased 4 cars at a cost of $30,000
each, and proceeded to rent these on a short-term basis to
people visiting Canberra. Accounting operating profit before tax
was as follows:
2016/7
$250,000
2017/8
$350,000
2018/9
$450,000
For taxation purposes the cars are
depreciable at 15% p.a. whilst for accounting purposes
they a depreciable at 10% p.a., both straight
line. The tax rate for the years 2016/7...
Part a Donahue Ltd purchased a plant on 1 July 2018 for N$300 000. The entity incurred transfer fees of N$90 000. The expected dismantling cost at the end of the useful life of the plant is N$200 000. The applicable discount rate after tax (tax rate 25.75%) 6.3% Useful life 12 years The plant is erected on rented premises and the rental agreement requires dismantling of the plant at the end of its useful life. Assume that Inland Revenue...
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