Ans 10. DA-P&amp;M

# Ans 10. DA-P&amp;M - BUSI 0018 Hong Kong Taxation...

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TA_U10_DA_Plant 1 BUSI 0018 – Hong Kong Taxation Tutorial Questions Tutorial 10 – Depreciation Allowance: Plant and Machinery Answer 23 (a) Computation of depreciation allowance for ABC Limited for 2009/10: 20% 30% Allowance Reducing value b/f \$65,000 \$30,000 Addition 8,000 - Less: Initial allowance (60%) (4,800) \$ 4,800 \$68,200 \$30,000 Less: Disposal ( 700) - . \$67,500 \$30,000 Annual allowance (13,500) ( 9,000) 22,500 Reducing value c/f \$54,000 \$21,000 \$27,300 (b) Depreciation allowance/charge for the old van for 2009/10: Reducing value \$4,000 Less: Sale proceeds (trade-in value) (5,000) Balancing allowance /(charge) \$(1,000) Depreciation allowance for the new van for 2009/10: Capital payment made: \$10,000 + \$5,000 + \$1,000 x 3 x \$25,000/\$30,000 = \$17,500 Allowance Cost (cash price) \$40,000 Less: Initial allowance (60% x \$17,500) (10,500) \$10,500 \$29,500 Annual allowance (30%) (8,850) 8,850 Reducing value c/f \$20,650 \$19,350

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