On 1 June 2018, Toby purchased a new truck to use in his business for $650,000. The Commissioner's effective life for the truck was 3 years. Toby decided to upgrade to a new Tesla-battery powered truck and sold his old truck to a 2nd hand truck dealer for 325,000 on 31 August 2019. Toby estimates he used his truck for business purposes for about 90% of the time. 

Advise Toby on the income tax consequences arising for him as a result of the disposal of the truck under BOTH: 

(a) the Prime Cost Method; 

(b) the Diminishing Value Method. Assume Toby is not a small business entity.

Answer rating: 100% (QA)

a Prime Cost Method Depreciation Under the prime cost method depreciation is calculated at a constan... View the full answer