tax6,7 - (7)-Machinery under hire purchase-31 Mar 2007, WDV...

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(6) 3 Jan 2009 - Mr. Wong’s son came back to Hong Kong - Mr. Wong allowed him to use one business car Market value $80,000 Original cost $100,000 - 1/3 time for private use Solution: s.37, s.38 and s.39C When assets are not wholly and exclusively used for business Non-pooling system Car only partly for business use (30%) Old rules apply i.e. D.A. computed for individual asset I.A. and A.A. limited to the business use portion Take away the value of the car from the 30% pool Market value! **[table08/09: minus $80,000 from the 30% pool] Add D.A. for it separately Computation: Market value $80,000 Annual allowance (30%) $24,000 note that W.D.V. become $56,000 Apportioned amount (30%) $16,000 **[table08/09: separately add D.A. for assets partly used for private purposes 16,000]
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Unformatted text preview: (7)-Machinery under hire purchase-31 Mar 2007, WDV = $900,000-Monthly installment = $50,000-Interest = $10,000-Capital portion paid = $40,000 (use for I.A.)-On 31 Mar 2008 (Y/A 07/08), installment paid and title transferred Solution: Ownership passed in the preceding year (Y/A 07/08) In Y/A 08/09, residual value transferred to the 30% pool Computation: In Y/A 07/08 WDV b/f (31 Mar 2007) $900,000 I.A. [($40,000 x 12) x 60%] ($288,000) $612,000 A.A. (30%) ($183,600) WDV c/f (31 Mar 2008) $428,400 residual value added to pool **[table08/09: add transferred from hire purchase machinery $428,400]...
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tax6,7 - (7)-Machinery under hire purchase-31 Mar 2007, WDV...

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