Calculate the annual allowable depreciation deductions for Ashley for the year ended 31 March 2020, assuming...

   

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Calculate the annual allowable depreciation deductions for Ashley for the year ended 31 March 2020, assuming that she wishes to maximise the amount claimed for depreciation for tax purposes. Your answer should include any adjustments made on the disposal of assets during the year. Show your workings. The IRD depreciation rates are outlined in the following table: Item Diminishing Value Depreciation Rate (%) Fitness equipment Sunbed Fridge Weightlifting equipment 40% 40% 16% 16% Straight Line Depreciation Rate (%) 30% 30% 10.5% 10.6% Ashley runs her own gym and fitness business. The business owns the assets shown in the following table. Currently Ashley uses the diminishing value method for depreciation Asset Cost Fitness equipment $50,000 Weightlifting equipment $25,000 (pooled for depreciation purposes) Fridge $4,000 Adjusted Tax Value (as at 1 April 2019) $25,000 $10,000 $1,500 We are given the following information in relation to the assets: The fitness equipment was sold for $30,000 on 1 June 2019. Five items of new weightlifting equipment were purchased on 1st December 2019, costing $500 each. These were added to the existing pool. A sunbed was purchased on 1st June 2019 at a cost of $2,100. The fridge was sold on 1st February 2020 for $4,500. Calculate the annual allowable depreciation deductions for Ashley for the year ended 31 March 2020, assuming that she wishes to maximise the amount claimed for depreciation for tax purposes. Your answer should include any adjustments made on the disposal of assets during the year. Show your workings. The IRD depreciation rates are outlined in the following table: Item Diminishing Value Depreciation Rate (%) Fitness equipment Sunbed Fridge Weightlifting equipment 40% 40% 16% 16% Straight Line Depreciation Rate (%) 30% 30% 10.5% 10.6% Ashley runs her own gym and fitness business. The business owns the assets shown in the following table. Currently Ashley uses the diminishing value method for depreciation Asset Cost Fitness equipment $50,000 Weightlifting equipment $25,000 (pooled for depreciation purposes) Fridge $4,000 Adjusted Tax Value (as at 1 April 2019) $25,000 $10,000 $1,500 We are given the following information in relation to the assets: The fitness equipment was sold for $30,000 on 1 June 2019. Five items of new weightlifting equipment were purchased on 1st December 2019, costing $500 each. These were added to the existing pool. A sunbed was purchased on 1st June 2019 at a cost of $2,100. The fridge was sold on 1st February 2020 for $4,500.

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Answer To calculate the annual allowable depreciation deductions for Ashley for the year ended 31 March 2020 we need to consider the adjustments made ... View the full answer