Anthony Daly purchased the following assets in May 2023, all of which were in use at 31 December 2023 in his sole trader baking business. Fixtures & fittings in retail shop 13,500 Signage 1,800 Ovens 25,000 Fixtures & fittings in production area 14,700 Delivery van 47,000 The premises occupied by Anthony's business comprise large retail outlet and a small production area where the baked goods are produced and packaged. Due to an increase in business, he decided to add an extension to the production area in October 2023 so that additional ovens, together with a small office space, could be installed. The costs associated with the extension, all of which have been capitalised, are set out below: Preparation of land for construction 3,500 Building structure 38,000 Air conditioning 8, 700 Office furniture 5, 100 Ovens 12,300 Fixtures & fittings 6, 750 Anthony prepares is accounts to 31 December each year. Requirement: Calculate the capital allowances available to Anthony for the year ended 31 December 2023 on the above expenditure.

Anthony Daly purchased the following assets in May 2023, all of which were in use at 31 December 2023 in his sole trader baking business. Fixtures & fittings in retail shop 13,500 Signage 1,800 Ovens 25,000 Fixtures & fittings in production area 14,700 Delivery van 47,000 The premises occupied by Anthony's business comprise large retail outlet and a small production area where the baked goods are produced and packaged. Due to an increase in business, he decided to add an extension to the production area in October 2023 so that additional ovens, together with a small office space, could be installed. The costs associated with the extension, all of which have been capitalised, are set out below: Preparation of land for construction 3,500 Building structure 38,000 Air conditioning 8, 700 Office furniture 5, 100 Ovens 12,300 Fixtures & fittings 6, 750 Anthony prepares is accounts to 31 December each year. Requirement: Calculate the capital allowances available to Anthony for the year ended 31 December 2023 on the above expenditure.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 38P

See similar textbooks

Similar questions

Mr. Pans owns and operates several retail auto parts and accessories outlets. Management is now considering the possibility of terminating the operation of the Accessories Store and leasing the facilities to another retailer. The monthly results of the Accessories Store operations are as follows: Sales P940,000 Operating expenses directly identifiable with the outlet: Cost of goods sold, etc P890,000 Depreciation 80,000 If operation of Accessories Store is terminated, Mr. Pans can rent-out the facilities for P60,000 a month to a non-competing business. Determine whether the company should continue operations or terminate the Accessories Store and rent-out the facilities. How much is the…
Mr. Pans owns and operates several retail auto parts and accessories outlets. Management is now considering the possibility of terminating the operation of the Accessories Store and leasing the facilities to another retailer. The monthly results of the Accessories Store operations are as follows: Sales P940,000 · Operating expenses directly identifiable with the outlet: Cost of goods sold, etc P890,000 Depreciation 80,000 If operation of Accessories Store is terminated, Mr. Pans can rent-out the facilities for P60,000 a month to a non-competing business. Determine whether the company should continue operations or terminate the Accessories Store and rent-out the facilities. How much is the advantage of better option? 1. Coniinue the Accessories Store – advantage of P 50,000 2. Terminate operation of Accessories Store - advantage of P50,000 3. Continue the Accessories Store - advantage of P10,000 | 4. Terminate operation of Accessories Store - advantage of P10,000
Please answer all parts of the question within 30 minutes.
The Barrington Construction Company builds office buildings. It also owns and operates achain of motels throughout the Northwest. On September 30, 2018, the company decidedto sell the entire motel business for $40 million. The sale was completed on December 15,2018. Income statement information for 2018 is provided below for the two components ofthe company.($ in millions)ConstructionComponentMotelComponentSales revenue $450.0 $200.0Operating expenses 226.0 210.0Operating income 224.0 (10.0)Other income (loss)* 16.0 (30.0)Income (loss) before income taxes 240.0 (40.0)Income tax expense (benefit)† 96.0 (16.0)Net income (loss) $144.0 $ (24.0)*For the motel component, the entire Other income (loss) amount represents the loss on saleof assets of the component for $40 million when their book value was $70 million.†A 40% tax rate applies to all items of income or loss.In addition, in 2018 the company had pretax net unrealized holding gains on investment securities of $3 million and a…
Karane Enterprises, a calendar-year manufacturer based in College Station, Texas, began business in 2022. In the process of setting up the business, Karane has acquired various types of assets. Below is a list of assets acquired during 2022 Asset Office furniture Machinery Used delivery truck *Not considered a luxury automobile. Cost $ 370,000 1,604,000 84,000 Date Placed in Service 02/03/2022 07/22/2022 08/17/2022 During 2022, Karane was very successful (and had no $179 limitations) and decided to acquire more assets in 2023 to increase its production capacity. These are the assets acquired during 2023: Cost $ 444,000 91,000 Asset Computers and information system Luxury auto Assembly equipment Storage building "Used 100% for business purposes. Karane generated taxable income in 2023 of $1,787,500 for purposes of computing the $179 expense limitation. (Use MACRS Table 1. Table 2. Table 3. Table 4. Table 5, and Exhibit 10-10) Note: Leave no answer blank. Enter zero if applicable. Input…
On July 1, 2016, Drenz Inc. purchased land and incurred other costs relative to the construction of a new warehouse. A summary of economic activities is listed below: Purchase price 925,000 Title Insurance 7,500 Legal fees to purchase land 5,000 Cost of razing old building on lot 42,500 Proceeds from sale of salvageable materials (6,000) Property taxes, January 1, 2016 - June 30, 2016 15,000 Cost of grading and filling building site 45,000 Cost of building construction 3,100,000 Interest on construction loan 60,000 Cost of constructing driveway 400,000 Cost of parking lot and fencing 60,000 Compute for the cost of the land?
On December 1, 2010, Hogan Co. purchased a tract of land as a factory site for $800,000. The old building on the property was razed, and salvaged materials resulting from demolition were sold. Additional costs incurred and salvage proceeds realized during December 2010 were as follows: 150. Cost to raze old building Legal fees for purchase contract and to record ownership Title guarantee insurance Proceeds from sale of salvaged materials $70,000 10,000 16,000 8,000 In Hogan's December 31, 2010 statement of financial position, what amount should be reported as land? a. $826,000. b. $862,000. c. $888,000. d. $896,000.
Riverbed Corporation builds in-home theater systems. Riverbed’s business is growing quickly. Therefore, the CEO, Paul Riverbed, decides to purchase three new trucks on September 20, 2017. The terms of acquisition for each truck are described below. 1. The first truck’s list price is $21,420. Riverbed exchanges home theater equipment from its inventory for the truck. The home theater equipment cost Molitor $13,260. Riverbed normally sells the equipment for $20,145. Riverbed uses a perpetual inventory system. 2. The second truck has a list price of $22,440. Riverbed makes a down payment of $5,100 cash on this truck and signs a zero-interest-bearing note with a face amount of $17,340. Payment of the note is due September 20, 2018. Riverbed would normally have to pay interest at a rate of 8% for such a borrowing. 3. The list price of the third truck is $19,584. This truck is acquired in exchange for 1,224 shares of common stock in Riverbed Corporation. The stock has a par…
Bramble Corporation builds in-home theater systems. Bramble’s business is growing quickly. Therefore, the CEO, Paul Bramble, decides to purchase three new trucks on September 20, 2017. The terms of acquisition for each truck are described below. 1. The first truck’s list price is $16,380. Bramble exchanges home theater equipment from its inventory for the truck. The home theater equipment cost Molitor $10,140. Bramble normally sells the equipment for $15,405. Bramble uses a perpetual inventory system. 2. The second truck has a list price of $17,160. Bramble makes a down payment of $3,900 cash on this truck and signs a zero-interest-bearing note with a face amount of $13,260. Payment of the note is due September 20, 2018. Bramble would normally have to pay interest at a rate of 8% for such a borrowing. 3. The list price of the third truck is $14,976. This truck is acquired in exchange for 936 shares of common stock in Bramble Corporation. The stock has a par value per…
Pota Berhad acquired a building costing RM2,400,000 on 1 May 2013 with anestimated useful life of 50 years. The building was occupied as theheadquarters for its business operations in Georgetown, Penang. In a recentboard meeting in January 2023, the directors had agreed to move thecompany’s headquarters to a new building located in Shah Alam, Selangor.Since then the company has been actively seeking a buyer. In addition,advertisements have also been placed to speed up the sale of the building.The building in Nilai has been vacated in October 2023. It was estimated thatproperty brokerage fee of RM45,000 and legal fee of RM26,000 will beincurred in order to sell the building.Required:Explain whether as at 31 December 2023, the building in Nilai can beclassified as a non-current asset held for sale in accordance with MFRS 5Non-current Asset Held for Sale and Discontinued Operations. Please give explanation in details with example
On February 1, 2010, Morgan Company purchased a parcel of land as a factory site for $200,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2010. Costs incurred during this period are listed below: $20,000 - Demolition of old building $35,000 - Architect's fees $5,000 - Legal fees for title investigation and purchase contract. $1,090,000 - Construction costs Salvaged materials resulting from demolition were sold for $10,000. Morgan should record the cost of the land and new building, respectively, as: $225,000 and $1,115,000 $210,000 and $1,130,000 $210,000 and $1,125,000 $215.000 and $1.125.000
Ron Swanson owns Swanson’s Woodcraft Connection, a store dedicated to woodworking tools, supplies, and design plans. On May 1, Year One, Swanson’s purchased a new warehouse to store additional inventory to help meet customer demand. Ron paid $50,000 for the warehouse and estimates that it will be used for twenty years. Salvage value is $5,000 and Swanson uses the straight-line method of depreciation. Swanson’s Woodcraft Connection has a December 31st year-end. What is the amount of depreciation to be taken in Year One? The amount of depreciation to be taken in Year One is: $ Question 2 The amount of depreciation to be taken in Year Two is:$ Question 3 Now, assume that Swanson’s Woodcraft Connection applies the half-year convention. The amount of depreciation expense to be taken in Year One is: $ Question 4 Assuming that Swanson’s Woodcraft Connection applies the half-year convention. The amount of depreciation expense to be…