Required: Prepare the capital allowance and residual expenditure schedules for the above assets for the years of assessment 2018 to 2021.
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Question 6
(b) Tingtong bought the following assets during the year 2017 for his retail
business. The Inland Revenue has sent notice to him that he is being
audited for the years of assessment 2018 to 2022.
A van costing RM30,000
Air conditioner costing RM3,000
Table and chairs costing RM2,000
Computer costing RM4,000
Required:
Prepare the capital allowance and residual expenditure schedules for the above
assets for the years of assessment 2018 to 2021.
Explain and elaborate the answer according to the question. Thank you.
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- Choose the letter of the correct answer Pedro Reyes purchased a delivery vehicle on January 1, 2016 amounting to PHP250,000. It is estimated that the vehicle will be useful for 10years. The vehicle can be sold for PHP10,000 at the end of its useful life. If the accounting period being reported by Pedro is one (1) year from January – December 2016, how much is the depreciation expense? a. Php240,000 b. Php24,000 c. Php20,000 d. Php2,000Question 1 Sejati Bhd buys a new machinery for RM10,000 on 1 January 2018. The machinery is estimated to be used for 5 years. After exactly 3 years, however, the machinery is suddenly sold for RM5,000. Sejati Bhd always provide a full year’s depreciation in the year when assets are purchased and no depreciation in the year when assets are disposed. Required: Prepare the accumulated depreciation for machinery accounts and machinery disposal accounts for years 2018, 2019 and 2020: Using the straight-line depreciation method (assume 20% p.a.) Using the reducing balance depreciation method (assume 40% p.a.).Question 4a. Ahmad bought a new equipment at RM120,000 on 1 July 2017. He wasundecided whether to depreciate the equipment using straight line method orreducing method at 20% per annum.The equipment is expected to have no residual value.You are required to calculate the amount of depreciation to be charged againsteach financial year ending 31 December 2017, 31 December 2018 and 31December 2019 using the straight line method and reducing balance method.Show your answer in the following format (per attache) b. The following are balances brought forward from 31 December 2018 for KCDeco Center :RM RMMotor Vehicles 100,000Less : Provision fordepreciation (20,000)80,000The motor vehicles were depreciated at 15% per annum using reducing balancemethod. KC bought a new vehicle on 1 October 2019, cost of the new vehiclewas RM120,000. You are required to prepare the following accounts for financialyear ending 31 December 2019 :i. The Motor Vehicle Accountii. The Provision for Depreciation…
- Accounting 11) Jill purchased a printing press for her business on 6/15/21 costing $60,000. The installation cost $2,000 and the sales tax was $5,000. (a)What is Jill's basis in the equipment? (b)Using the info in question 11, what is the amount of depreciation for 2021?question 1 part 1 A company resident in Trinidad and Tobago purchased the following assets in 2022: Asset Cost $ USDHonda Motor car purchased in May 2022 38,000Heavy Equipment 50,000Computer (CPU) 4,000Factory Buildings 72,000i. What would be the difference in capital allowances for 2023 if this company was resident in Jamaica instead of Trinidad and Tobago. ii. State two reasons for the difference. iii. Explain two circumstances in which obtaining capital allowances on the reducing balance basis may be more beneficial than on the straight-line basis. Part BOMG is in a country which has a capital gains tax, conducted the following transactions: a. Purchased a building in February 2018 for $26,000,000. In March 2019, the companyspent $2,000,000 to install solar panels for electricity in the building. The building was sold for $28,500,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,500,000. b. A…Question 1Part 1A company resident in Trinidad and Tobago purchased the following assets in 2022: Asset Cost $ USDHonda Motor car purchased in May 2022 38,000Heavy Equipment 50,000Computer (CPU) 4,000Factory Buildings 72,000i. What would be the difference in capital allowances for 2023 if this company was resident in Jamaica instead of Trinidad and Tobago. (16 marks)ii. State two reasons for the difference. ( 2 marks)iii. Explain two circumstances in which obtaining capital allowances on the reducing balance basis may be more beneficial than on the straight-line basis. (2 marks).20 marks Part BOMG is in a country which has a capital gains tax, conducted the following transactions: a. Purchased a building in February 2018 for $26,000,000. In March 2019, the companyspent $2,000,000 to install solar panels for electricity in the building. The building was sold for $28,500,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal…
- Problem 3 On June 30, 2020, Zendaya purchased a special machinery to conduct its oil drilling operations in Davao for P5,000,000, its useful life is 10 years. The Company is required by local government to clean the area after the drilling operations. The estimated clean-up costs was P1,500,000. The relevant discount rate was 8%. How much is the provision to be recognized in the statement of financial position as of December 31, 2020? (Round off answers to the nearest whole number)Question 1Sejati Bhd buys a new machinery for RM10,000 on 1 January 2018. The machinery is estimated to be used for 5 years. After exactly 3 years, however, the machinery is suddenly sold for RM5,000. Sejati Bhd always provide a full year’s depreciation in the year when assets are purchased and no depreciation in the year when assets are disposed. Required: Prepare the accumulated depreciation for machinery accounts and machinery disposal accounts for years 2018, 2019 and 2020: a. Using the straight-line depreciation method (assume 20% p.a.) b. Using the reducing balance depreciation method (assume 40% p.a.).1 part 1 A company resident in Trinidad and Tobago purchased the following assets in 2022: Asset Cost $ USDHonda Motor car purchased in May 2022 38,000Heavy Equipment 50,000Computer (CPU) 4,000Factory Buildings 72,000i. What would be the difference in capital allowances for 2023 if this company was resident in Jamaica instead of Trinidad and Tobago. ii. State two reasons for the difference. iii. Explain two circumstances in which obtaining capital allowances on the reducing balance basis may be more beneficial than on the straight-line basis. Part BOMG is in a country which has a capital gains tax, conducted the following transactions: a. Purchased a building in February 2018 for $26,000,000. In March 2019, the companyspent $2,000,000 to install solar panels for electricity in the building. The building was sold for $28,500,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,500,000. b. A motor…
- a. Identify the following transactions as either Capital Expenditure or RevenueExpenditure.i). Pay salary and wages for November 2020 amounting to RM6,200.ii). Purchase vehicle for business use amounting to RM145,000.iii). Depreciation expense for financial year ended 2020 amounting to RM21,000.iv). Purchase stationery for office use amounting to RM450.v). Acquire a building amounting to RM520,000.vi). Repair office door amounting to RM800.Question 1 On January 1, 2017 Baker purchased a new stamping machine for its plant. This new piece of equipment cost $120,000 and was recorded in Baker's accounting system with a $120,000 debit to the Equipment account and a $120,000 credit to the Cash account. Baker estimates that the stamping machine will last 5 years and will have no value at the end of those 5 years. At the end of January, February, March, April, and May, Baker made the correct depreciation adjusting entries. Select the June 30, 2017 adjusting entry Baker should make for June’s depreciation: (A) Accumulated depreciation: 2,000 ________ depreciation: expense _______ 2,000 (B) depreciation expense 12,000 _______ accumulated depreciation: ______ 12,000 (C) depreciation expense 2,000 ______ accumulated depreciation ______ 2,000 (D) depreciation espense 24,000 ________ cash _______ 2,000 loss of…b. The following are balances brought forward from 31 December 2018 for KC Deco Center : RM RMMotor Vehicles 100,000Less : Provision for depreciation (20,000)80,000The motor vehicles were depreciated at 15% per annum using reducing balance method. KC bought a new vehicle on 1 October 2019, cost of the new vehicle was RM120,000. You are required to prepare the following accounts for financial year ending 31 December 2019 :i. The Motor Vehicle Accountii. The Provision for Depreciation Account