Question: Green House Ltd, a housing developer, commenced its operation on 25 July 2016 and closes its accounts to 30 April annually. Below are the non-current

Green House Ltd, a housing developer, commenced its operation on 25 July 2016 and closes its accounts to 30 April annually. Below are the non-current assets owned by the company as at 1 May 2019:

Assets

Cost

Date of Purchase

Office equipment

$84,000

14 March 2016

Heavy machinery

$360,000

6 November 2016

Passenger car

$105,000

19 March 2018


The following transactions occurred during the year ended 2020:

1. The company purchased new machinery on 17 August 2019 for $180,000,

including $25,000 for installation. Before the installation, $28,000 was incurred

for levelling land to prepare site for the installation.

2. The heavy machinery was traded in on 10 December 2019 for a new, advanced

machine. The new heavy machinery costs $500,000. The accepted trade in value

for the old machine was $148,000.

3. The passenger car was provided for the Managing Director of the company. On 12

January 2020, the car was sold for $62,000.

A new passenger car was purchased on hire purchase basis, based on the following

Terms:

Hire purchase price

$280,000

Cash price

$250,000

Deposit (paid on 12 January 2020)

$10,000

No. of monthly instalment

60

First instalment due on

15 Feb 2020

It was agreed by the IRB that ¼ of the car usage (both cars) was for the Managing Director’s personal purpose.

4. A television and a projector were purchased on 1 March 2020 for $3,400 and $1,200, respectively. They are for office use.


Required: Determine the capital allowance, balancing allowance and/or balancing charge (if any) for Green House Ltd. for all the relevant years of assessment up to the year of assessment 2020

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