Compute the capital allowance(s), balancing allowance(s) and or balancing charge(s) for the year of assessment 2021.
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A manufacturing company, incurred capital expenditure on a factory building and machinery as follows, for the year ended 30 November 2021:
Required:
Compute the capital allowance(s), balancing allowance(s) and or balancing charge(s) for the year of assessment 2021.
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- A company is going to buy a new equipment for manufacturing itsproduct. Four different equipment’s are available; costs, operating and otherexpenses are as follows:Equipment A B C DFirst Cost Php 24,000 Php 30,000 Php 49,600 Php 52,000Power per year Php 1300 Php 1360 Php 2400 Php 2520Labor per year Php 10,600 Php 9320 Php 4200 Php 2700Maintenance/year Php 2800 Php 1900 Php1300 Php 700Taxes & Insurance 2% 2% 2% 2%Life; years 5 5 5 5 Money is worth 10% before taxes to the company. Which equipment shouldbe purchased ? Choose which method is applicable.heavy equipment for a certain project and the details are as follows: ITEM: MACHINE A: MACHINE B: First Cost P2,000,000.00 P3,000,000.00 Annual operating P325,000.00 P250,000.00 cost Annual labor cost Insurance and taxes Payroll taxes Estimated life P500,000.00 P320,000.00 4% 10% 12 yrs. 4% 10% 12 yrs. If the minimum ROR is 25%, What is the annual cost of Machine A & B using present worth method?Foster has built a new factory incurring the following costs: $'000 Land 1,200 Materials 2,400 Labour 3,000 Architect's fees 25 Surveyor's fees 15 Site overheads 300 Apportioned administrative overheads 150 Testing of fire alarms 10 Business rates for first year 12 7,112 What will be the total amount capitalised in respect of the factory? A $6,112,000 B $6,950,000 C $7,112,000 D $7,100,000
- Foster has built a new factory incurring the following costs: Land GH₵1,200,000 Materials GH₵2,400,000 Labour GH₵3,000,000 Architect's fees GH₵25,000 Surveyor's fees GH₵15,000 Site overheads GH₵300,000 Apportioned administrative overheads GH₵150,000 Testing of fire alarms GH₵10,000 Business rates for first year GH₵12, 000. What will be the total amount capitalised in respect of the factory?Maxtor Technology incurred the following costs during the year related to the creation of a new type of personal computer monitor: Salaries $220,000 Depreciation on R&D facilities and equipment Utilities and other direct costs incurred for the R&D facilities Patent filing and related legal costs Payment to another company for performing a portion of the development work Costs of adapting the new monitor for the specific needs of a 125,000 66,000 22,000 120,000 80,000 customer What amount should Maxtor report as research and development expense in its income statement? Salaries of IT employees working exclusively on the project:R670 000 Employee awareness leaflets: R32 000 General overhead cost allocation: R123 000 Specialist consultancy service: R432 000State what value for each of the above four expenditures will beincluded in the capitalised cost of the ERP system. Write downonly the amounts.
- R Company made the following expenditures Initial design fee for proposed extension of office building 150.000 New condenser for central conditioning unit 10,000 Purchase of executive chairs and desks 200.000 Purchase storm windows and screens and their Installation on all office windows 500.000 80.000 Sealing of roof leaks in production area Replacement of door to production area Installation of automatic door opening 50,000 system 200 000 Overhead crane for assembly department to speed up production 350.000 Replacement of broken gear on machine 60.000 What total amount should be charged to repair and maintenance expense ?föllowing Cost Factor Site B 170,000$ Site A Price of land 100,000S Monthly cost of delivering materials S 10,000 $ 7,000 Cost of equipment setup $ 12,000 $ 9,000 Cost of utilities per month $ 1,500 1,100 For site A, an extra $ 60/ day is needed for additional site guards. a- Which site should the contractor select? b- When do the costs of two sites are equals (After how many months of work the costs are similar)?Cost $150,000 Training $17,000 Installation $15,000 Cisco Systems is purchasing a new bar code - scanning device for its service center in San Francisco. The table on the right lists the relevant initial costs for this purchase. The service life of the system is 4 years and its salvage value for depreciation purposes is expected to be about 28% of the hardware cost. Cost Item Hardware a. What is the cost basis of the device? b. What are the annual depreciations of the device if (i) the SL method is used? (ii) the 150% DB method is used? (iii) the 200% DB method is used? c. Calculate the book values of the device at the end of 4 years using all the methods above. Answers: (a) The cost basis of the device is $☐ (Round to the nearest dollar) (b) Annual depreciaitions and book values: (Round to the nearest dollar) SL Year 1 2 $ 3 4 Book values at $ end of year 4 150% DB ☐ 200% DB $ $
- RLC Manufacturing is planning to purchase a cutting equipment. Information are as follows: Equipment 1 Equipment 2 First Cost P 12,000 P 18,000 Salvage Value P 600 P 2,000 Annual Operation P 3,200 P 2,500 Annual Maintenance P 1,200 P 1,000 Taxes & Insurance 3% 3% Life, years 10 15 Money is worth at least 16%. Which equipment should be selected? Use: Annual Cost MethodBonus Corporation is installing a new machine at its production facility. It has incurred these costs: Purchase price (including input tax of P300,000) P2,800,000 Initial delivery and handling costs 200,000 Costs of site preparation 600,000 Consultants used for advice on the acquisition of the machine 700,000 Installation and assembly costs 500,000 Costs of testing 100,000 Costs of training employees on how to use the machine 80,000 Estimated dismantling costs to be incurred after 7 years 300,000 Operating losses before commercial production 400,000 The cost of the machine is A. 4,900,000 B. 5,200,000 C. 4,200,000 D. 4,980,000A manufacturer incurs the following costs: $38,000 developing new techniques that will be put in place shortly to cut production costs; $27,000 researching a new process to improve the quality of the standard product and $8,000 on market research into the commercial viability of a new type of product. It is company policy to capitalise costs whenever permitted by IAS 38 Intangible Assets. 9.7 How much should be charged as research and development expenditure in profit or loss? (ignore amortisation) $73,000 $35,000 $27,000 $38,000 A 229ni2ud a yde C BPP EARNING MEDIA