1. On 1 March 20X1, Mary McDonald purchased a new computer for use in her business. The invoice from the supplier showed the following expenses:

	$
Computer cost	5,500
Delivery fee	100
Installation fee	300
Computer software	2,000
Maintenance of computer for 12 months	400 $8,300

Assuming that the computer has an estimated effective life of four years, what deductions (if any) could Mary McDonald claim for the year ending 30 June 20X1?

2. Dr Timothy Jones runs his own business as a psychiatrist. He owns a Falcon car (ie 2.601 litre and over engine capacity) which was purchased on 1 July 20X0 at a total cost of $38,000.

In prior years, Timothy has travelled 20,000 km per year, of which 12,000 is estimated to be for business purposes. The actual running costs (including depreciation) are estimated to be $15,000 per year.

• Advise Timothy Jones what is the maximum yearly deduction he could potentially claim for running the car.
• Explain to Timothy Jones what are the substantiation requirements he needs to comply with according to the tax law.

Edit , can you please help in answering the 2nd part of the question relating to the car