Question: Question 1 The firm which is a qualifying SME, (Small medium enterprise) bought a new computer numerical control (CNC) machine on hire purchase terms for

Question 1

The firm which is a qualifying SME, (Small medium enterprise) bought a new computer numerical control (CNC) machine on hire purchase terms for the manufacturing department. The details are as follows:

Down payment on 1/3/19 $355,000

20 monthly instalments of $162,000

due on 1st day of each month 3,240,000

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Hire purchase price 3,595,000

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The cash price of the machine was $2 million and the first instalment was due on 1 April 2019.

Required:

b) Calculate the amount of capital allowances that the company can claim for all relevant years of assessment. Assume it does not qualify for PIC scheme

i) using S19

ii) using S19A

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