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Congratulations on your appointment as a Tax Trainee at a recognized audit firm in
Jamaica. On your first assignment your supervisor asked you to assist him with the
income tax computation of a small business in the tourism sector. The company
provided the following information
Allen’s Rest Well Resort is a resort cottage located incorporated in Jamaica. The
company is a registered tourism operator under the Tourist Board Act. The hotel
commenced operations on the 1 January 2019.
Fixed Assets
| Cost (J$) | TWDV (J$) | |
| Building (hotel) | 100,000,000 | |
| Furnitures | 8,000,000 | |
| Computers (laptops and CPUs) | 1,000,000 | |
| Computers (printers and monitors) | 500,000 | |
|
Motor Cars # 1 purchased in July 2019 # 2 purchased January 2019 |
3,000,000 2,500,000 |
2,437,500 1,875,000 |
| Bus and Vans (purchased 1 January 2019) | 8,000,0000 | 4,800,000 |
The following acquisitions and disposal occurred in 2021:
1. A Corolla motor car purchased for $3,000,000. Acquired 1 April 2021.
2. A BMW for $10,000,000. Acquired 1 November 2021.
3. A new building constructed for $30,000,000
4. Laptop for $100,000
5. Purchase of a telephones for $950,000.
6. The company Motor car #1 was sold for $2,700,000
Assume the relevant exchange Rate is J$152: USD$1
Question
Calculate the capital allowance computation for Allen’s Rest Well Resort for 2021.
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