Jim owns a lawn-mowing business. He decides to buy a second hand trailer to replace his existing
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Question:
Jim owns a lawn-mowing business. He decides to buy a second hand trailer to replace his existing trailer. Jim investigates how much it will cost to repair the second hand trailer and bring it up to the required standard, and finds the following:
Replace rusted base plate | $1,500 |
New paint and signage | $1,200 |
New tyres | $ 200 |
New wiring | $ 450 |
Total | $3,350 |
What amount will be deductible and under which section?
Select the correct answer from the options below.
Select one:
$0 under s25-10 as the repairs are initial repairs
$3,350 under s25-10
$3,350 under s8-1as the repairs are incurred to gain business income
$2,150 under s25-10
None of these
Related Book For
Introduction to Financial Accounting
ISBN: 978-0133251036
11th edition
Authors: Charles Horngren, Gary Sundem, John Elliott, Donna Philbrick
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