Sharma has an advertising business and uses a low value asset pool in calculating his depreciation...

 

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Sharma has an advertising business and uses a low value asset pool in calculating his depreciation deductions. The closing balance in his low-value pool as at 30 June, 2019 was $19,000. His Capital purchases during the year were a printer costing $650 and a computer costing $950. Both the printer and the computer were used 50% of the time in the business and 50% of the time for private use. Sharma also purchase a special desk (furniture) on 1st July, 2019 that was designed specially to draw for the amount of $2,000 that has a useful life of 5 years. Sharma decided to use the prime cost method to depreciate the desk. (Note - Your answer must include references to the relevant tax law and/or cases.) Required: a) Based on your knowledge of Capital Allowances and the low value asset pool, calculate Sharma's depreciation deduction for the year. (10 marks) Sharma has an advertising business and uses a low value asset pool in calculating his depreciation deductions. The closing balance in his low-value pool as at 30 June, 2019 was $19,000. His Capital purchases during the year were a printer costing $650 and a computer costing $950. Both the printer and the computer were used 50% of the time in the business and 50% of the time for private use. Sharma also purchase a special desk (furniture) on 1st July, 2019 that was designed specially to draw for the amount of $2,000 that has a useful life of 5 years. Sharma decided to use the prime cost method to depreciate the desk. (Note - Your answer must include references to the relevant tax law and/or cases.) Required: a) Based on your knowledge of Capital Allowances and the low value asset pool, calculate Sharma's depreciation deduction for the year. (10 marks)

Answer rating: 100% (QA)

a The total depreciation deduction of Sharmas for the year is 7675 Explanations As per law ... View the full answer