a. Based on the provisions of the Income Tax Act, distinguish between trade vehicles and private vehicles and state how each is treated for capital allowances.

b. If Jacobs Ltd bought a motor car which is classified as private vehicle for $1 000 000 on January 1 2014 and sold it for $800 000 December 31, 2015, what would be the capital allowances for the company up to December 2015?

c. Differentiate between a balancing allowance and a balancing charge with the aid of numerical examples.

NB. For any necessary calculation, use JMD 115 to US 1 for exchange rate conversion.