ACCT3503 Question 2 A. B. Explain the following terms when used in capital allowance computation. Where applicable, briefly discuss application of rates and where these rates are derived from. 1. Original cost of asset. 2. Initial Allowance. 3. Annual Allowance. 4. Balancing Charge. 5. Balancing Allowance. (I mark) (2 marks) (2 marks) (2 marks) (2 marks) The following information relates to Robwise Limited which operates a Car Rental Agency along with other associated ventures. i. 2018: Purchased a fleet of motor cars used in his Car Rental business valued at J$10 million. ii. Has one (1) private motor vehicle used in the business, purchased in 2020 for US$30,000. iii. Cost of machinery purchased in January 2019 for use in the production of primary products is J$5 million. iv. In February 2021 the company achieved a major milestone by moving out of previously rented premises into a newly refurbished building constructed of concrete, steel and cement. The building is treated as an industrial building valued at J$8 million. Note: Exchange rate to be used for all foreign exchange transactions is JS140-USS1 Required: Compute capital allowances to be claimed by Robwise Limited for year of assessment 2021. (11 marks)