Depreciating Assets (Total 10 Marks)

a. Memo is a small business taxpayer. At 1 July 2019 the balance of the taxpayers Small Business Depreciation pool was $47,000. During the year ended 30 June 2020 Memo entered into the following transactions:-

Date	Transaction	Amount excluding GST $	Effective Life (years)
1 August 2019	Car	62,500	6
1 December 2019	Cash register	980	3
1 January 2020	Machinery	85,000	7
15 January 2020	Office Furniture	17,500	8

All assets, including the car, are used 100% for business purposes. In May 2020, Memo sold a car used 100% for business for $11,500. The car cost $30,000 when it was purchased on 1 July 2016.

Required

1. Calculate the maximum income tax deduction available to Memo for the year ended 30 June 2020 in relation of the above depreciating assets.

5 marks

2. Calculate the closing balance of Memos Small Business Depreciation Pool at 30 June 2020. 2 marks