On January 2016, Ali manufacturers Ltd commenced operations in Mombasa. The company incurred capital expenditure on...

 

 

  

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On January 2016, Ali manufacturers Ltd commenced operations in Mombasa. The company incurred capital expenditure on the following assets before starting operations. Kshs. Industrial building Forklift 24,000,000 960,000 1,200,000 480,000 600,000 1,480,000 240,000 240,000 640,000 720,000 180,000 780,000 440,000 560,000 400,000 Processing machinery Peugeot 504 Pick-up (second hand) Water boilers Workers quarters Furniture and fittings Milling machine Borehole Computers Office partitions Tractor Sports pavilion Staff canteen Conveyor belts Saloon car (new) 2,500,000 Additional information: 1. The cost of the industrial building includes: Warehouse Show room Retail shop Swelling house Kshs. 4,000,000 200,000 300,000 180,000 The rest of the industrial building was used for industrial purposes. 2. Workers quarters were occupied with effects from 1" October 2017. The Saloon car was partly used for private purposes. Private use of the motor vehicle was agreed with the tax authority as 40% of the total mileage for each year. The Saloon car was disposed of in year 2017 at Kshs.800,000. 3. 4. The cost of computers includes software purchased for Kshs.120,000 Required: Capital allowances due to A/c Manufacturers Ltd for the year ended 31st December 2016 and 2017. [Total: 25 marks] On January 2016, Ali manufacturers Ltd commenced operations in Mombasa. The company incurred capital expenditure on the following assets before starting operations. Kshs. Industrial building Forklift 24,000,000 960,000 1,200,000 480,000 600,000 1,480,000 240,000 240,000 640,000 720,000 180,000 780,000 440,000 560,000 400,000 Processing machinery Peugeot 504 Pick-up (second hand) Water boilers Workers quarters Furniture and fittings Milling machine Borehole Computers Office partitions Tractor Sports pavilion Staff canteen Conveyor belts Saloon car (new) 2,500,000 Additional information: 1. The cost of the industrial building includes: Warehouse Show room Retail shop Swelling house Kshs. 4,000,000 200,000 300,000 180,000 The rest of the industrial building was used for industrial purposes. 2. Workers quarters were occupied with effects from 1" October 2017. The Saloon car was partly used for private purposes. Private use of the motor vehicle was agreed with the tax authority as 40% of the total mileage for each year. The Saloon car was disposed of in year 2017 at Kshs.800,000. 3. 4. The cost of computers includes software purchased for Kshs.120,000 Required: Capital allowances due to A/c Manufacturers Ltd for the year ended 31st December 2016 and 2017. [Total: 25 marks]