Good Trading Ltd carries on a trading business in Hong Kong. It incurred the following capital expenditure
Question:
Good Trading Ltd carries on a trading business in Hong Kong. It incurred the following capital expenditure during the year ended 31 March 2021. 1 April 2020 Written down value of plant and machinery:
20% pool: $150,000
30% pool: $672,000
1 July 2020 Sold a delivery van with sale proceeds of $80,000. The original cost was $200,000, and the net book value was $60,000.
1 August 2020 Purchased a motor vehicle at the price of $180,000.
1 September 2020 Director’s office furniture was scrapped without any sale proceeds although they had a net book value of $40,000.
2 September 2020 Purchased director’s office furniture at a total price of $300,000.
1 November 2020 Purchased five delivery vans by hire-purchases terms:
Total cash price: $400,000
Total deposit: $100,000 payable
on 1 November 2020 Total monthly installments: $17,500
Total number of installments: 24
First monthly installment was payable on 1 December 2020.
Rate of Annual Allowances: Office furniture 20% Motor vehicle/delivery van 30%
Required:
Compute the total amount of depreciation allowances available to Good Trading Ltd for the year of assessment 2020/21. Show all your workings. (10 marks)
Accounting What the Numbers Mean
ISBN: 978-0073527062
9th Edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,