One of your clients, Corey Hart, is the sole director and sole shareholder of Sunglass World Pty Ltd. The company is a retail store that specialises in selling a range of designer-label high-end sunglasses.

The company is registered for the GST and accounts for the GST on the non-cash (accruals) basis.

The company has three stores - one in the Brisbane CBD, the other in Indooroopilly and the third store in Surfers Paradise on Queensland's Gold Coast.

The company was incorporated in Australia in May 2010. The company had a turnover of $2.4 million in 2019 and is expecting a turnover of approximately $2.6 million for the 2020 financial year. The company is likely to have a taxable income of approximately $160,000 in respect of the year ended 30 June 2020.

Corey informs you that on 17 November 2019, the company acquired a new motor vehicle, a 2019 Mercedes C350 Class Sedan, which was financed via a chattel mortgage agreement.

A copy of the tax invoice for the purchase of the new car is attached for your reference on the following page.

2019 Mercedes C350 Class Sedan

MERCEDES BENZ BRISBANE TAX INVOICE

194 Breakfast Creek RoadABN: 23 004 411 410

Newstead, QD, 4006.

SOLD TO:INVOICE NUMBER:4126

INVOICE DATE:17 November 2019

Mr Corey HartORDER NUMBER:8633

Sunglass World Pty LtdSALES REPRESENTATIVE: Mr Michael Sembello

14 Queen Street

Brisbane, QLD, 4000.

2019 Mercedes C350 Class Sedan81,000.00

Colour trim2,156.50

Seat comfort package1,872.00

Sunroof2,448.00

Vision package1,416.90

Registration fee *513.50

Compulsory third party (CTP) insurance *640.18

Dealer delivery charges4,753.04

Stamp duty2,912.34

Luxury car tax2,287.54

Total amount payable (drive away price):$100,000.00

Payments received:

Hightower Finance Company - chattel mortgage$100,000.00

Balance due:$0.0

*Amounts are shown inclusive of GST (where applicable). All amounts shown above totalling $100,000 have been charged to the customer by the motor car dealership. Assume that in this PBL, the CTP insurance of $640.18 shown above is exclusively GST-free. In practice, CTP insurance has a component that is GST-free (the stamp duty component) and a component that is taxable. There is no GST on the registration fee.

Hint:For each of the costs detailed above that make up the total of $100,000, students need to work out which costs would be capitalised (and therefore form part of the cost of the motor vehicle in the Balance Sheet) and which costs would be expensed to the Income Statement.

Required

Prepare an extract of the company's Balance Sheet showing the asset (ie. the motor vehicle) and the associated outstanding chattel mortgage liability as at 30 June 2020. Please show your workings as to how you have calculated the cost of the new motor vehicle in the Balance Sheet

Students are only required to show the cost of the motor vehicle (and any accumulated depreciation) as well as the amount owing in relation to the chattel mortgage liability at 30 June 2020. There is no need to prepare detailed notes to the accounts and no need to draft the accounting policy note (Note 1).