Question 2 (CLO #4) (a.) Define the term Capital Allowance? [3 marks] (b.) Explain the following types of capital allowances: Initial Allowance [3 marks] Investment Allowance [3 marks] Annual Allowance [3 marks] (c.) Identify three (3) conditions that distinguishes a trade vehicle from a private vehicle. [3 marks] (d) Peter manufactures office furniture and makes up his accounts to the 31st of December each year. He rents the work-shop premises. The following assets were acquired on the dates shown: Plant Pickup truck Plant Motor Car (used privately) 1 June 2012 1 January 2013 Cost $50,000 Cost $200,000 30 April 2013 Cost $300,000 30 April 2013 Cost $150,000 The plant that was bought on 1 June 2012 was sold on 31 December 2014 for $25,000. No further acquisitions or disposals took place before December 2015. For tax purposes, vehicles have the following capital allowances: An initial allowance of 12.5% and an annual allowance of 12.5% (SL). Plant are given an initial allowance of 20% and an annual allowance of 11.25% (SL). Required Compute the capital allowances for the years of assessment 2013, 2014 and 2015. [15 marks]