Trickster Holdings purchased an asset costing $1732710. Freight costs of $54890 and installation costs of $23481...
Trickster Holdings purchased an asset costing $1732710. Freight costs of $54890 and installation costs of $23481 were also required to place the machine in an operational state.
The firm expects to use the asset for 7 years and the Taxation Office advises the asset has a useful life of 8 years.
Calculate the depreciation tax benefit/saving (to the nearest whole number ignoring the $ sign) that will apply in each allowable year.
The Australian Company Tax Rate applies.
Homework Answers
Total cost of the asset- 1732710
Add: Freight cost 54890
Add: Installation cost 23481
Total cost: 1811081
Useful life: 7 Years
Depreciation: 258726 approx.
Tax benefit/saving on depreciation:
258726*30% i.e 77618 approx.
Assumptions made:
1. Asset is purchased on the first day of financial year.
2. Company is not a small business company and fall under 30% tax
bracket.
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