10 - BUSI 0018 Hong Kong Taxation Tutorial Questions Unit...

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1 BUSI 0018 – Hong Kong Taxation Tutorial Questions Unit 10 – Depreciation Allowance: Plant and Machinery Question 23 (a) ABC Limited is a trading company. During the year to 31 December 2008, three items of office furniture (20%) were purchased for $8,000 and two old items (the cost of which was $3,000 and the tax reducing value was $900) were sold for $700. The tax reducing value of the assets as at 1 January 2008 was: 20% pool $65,000 30% pool $30,000 Required : Compute the depreciation allowance for the year of assessment 2008/09 for ABC Limited. (b) Mr. Cheung purchased a new delivery van under hire purchase on 1 January 2009 to replace the old one for his business during the year ending 31 March 2009. Cost of the new van (cash price) $40,000 Less: Old van trade-in value (5,000) 35,000 Less: Down payment (10,000) 25,000 Add: Interest (5,000) 30,000 The sum of $30,000 is payable by 30 equal monthly installments of $1,000 each commencing 1 January 2009. The cost of the old van was $20,000 and its tax written down value as at 1 April 2008 was $4,000. It was the only asset in the 30% pool of Mr. Cheung’s business. Required : Compute the depreciation allowance (or balancing allowance/charge as appropriate) for the old van and the new van respectively for the year of assessment 2008/09. Check figures of depreciation allowances:
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This note was uploaded on 04/07/2012 for the course TAX 101 taught by Professor Ng during the Spring '12 term at HKU.

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10 - BUSI 0018 Hong Kong Taxation Tutorial Questions Unit...

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