On 30 September of the previous tax year, Car Doctors Service Centre purchased a second-hand car hoist for its workshop. The car hoist cost $37 000. Transportation costs to get the car hoist to the workshop amounted to $600 and it cost a further $150 for transit insurance.

While the effective life of the car hoist is seven years, it had to have repairs costing $1100 in order to get it into an operational condition. The car hoist was not installed ready for use until 1 October of the previous tax year.

What is the maximum amount that is allowable as a capital allowance deduction in relation to the car hoist for the current income tax year ended 30 June?

Hint - you must firstly calculate depreciation for the previous income tax year

Select one:

1.

$5550.

2.

$8302.

3.

$8728.

4.

$8480.

5.

$8312.