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Uniform Capital Allowance Hulk ran a successful scrapyard business knowns as the

Uniform Capital Allowance Hulk ran a successful scrapyard business knowns as the "Green Junk Yard" and during the year purchased some additional plant and equipment for the business. He traded-in or scrapped several of the older pieces of equipment. The details of his existing plant and equipment and transactions during the year are as follows: Existing plant and Equipment (use this information to create the 2019 schedule eg Office Furniture OAV for 2019 is $1500)

Cost using DV moth Office Furniture 4,200 1,500 40% Crushing 15,000 7,400 20% Machine A Crushing 6,000 3,000 20% Machine B Motor Vehicle 18,000 16,575 25.0% Crushing 7,000 5,000 10.0% Machine C Crushing 12.500 12,082 20% Machine D Carpets 5,700 5,319 40% Computer* 2.500 1.865 40% Note plant marked with is sold/scrapped (see below) Item Computer Cost 3,790 Effective Life Purchase Date 19/09/CY (eg (19/9/18) 15/12/CY 3/03/CY 4/4/CY 5/5/CY Office Safe 1,920 Display Cabinet 8,000 Display Racks1,000 Laptop 1 ,580 Cash Register 3,220 New Motor Vehicle 55,000 (actual price) con www 7/6/CY 18/6/CY Sale/Scrapping of Plant and Equipment Sale Date 19/09/CY Item

SIT Price Computer broke down S0 and could not be fixed Sale of Crushing Machine $10,000 31/01/CY 18/06/CY Motor Vehicle used as a trade in on new car $8,000 What you should do to prepare for the online test a) Calculate the deduction for depreciation using Schedule A for Hulk (he does not want to use any pooling). b) Calculate any balancing adjustments that need to be included in Hulk's taxable income c) Re-do the question assuming now that Hulk is an SBE taxpayer and wishes to use pooling. The opening pool balance value is equal to the OWDV of the existing plant and equipment tabled above. d) Provide the legislative references from the Income Tax Assessment Act 1997 and 1936

Jan 31 2020 View more View Less

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