RK Co purchased a machine on 1st November 2020 at the cost of $110,000 (inclusive of GST) and exclusively used it to manufacture for the Co’s production. The machine’s effective life is ten years. 2. Andy purchased a Toyota car and use it 100% for business purpose on 1st October 2020 at the cost of $74,000 (inclusive GST), estimated to have a useful life of twelve years.   Required: With reference to relevant legislation and case law, discuss and calculate what amount is allowed as a deduction for the decline in value of the machinery and the car discussed above, using both prime cost and diminishing value methods.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 7EA: Alfredo Company purchased a new 3-D printer for $900,000. Although this printer is expected to last...
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  1. RK Co purchased a machine on 1st November 2020 at the cost of $110,000 (inclusive of GST) and exclusively used it to manufacture for the Co’s production. The machine’s effective life is ten years.

2. Andy purchased a Toyota car and use it 100% for business purpose on 1st October 2020 at the cost of $74,000 (inclusive GST), estimated to have a useful life of twelve years.

 

Required: With reference to relevant legislation and case law, discuss and calculate what amount is allowed as a deduction for the decline in value of the machinery and the car discussed above, using both prime cost and diminishing value methods.

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