QUESTION FOUR-DEPRECIATION Theo and Gina have a small beekeeping and honey business in Kpiti. The following assets are owned as at 1 April 2019 and are used exclusively by Theo and Gina for their business. All assets were purchased new. Asset Cost Adjusted Tax Value (at 1 April 2019) Beekeeping equipment $10,000 $8,000 Labelling machine $3,000 $2,700 Honey extractor $2,500 $1,600 Crates (for storing jars of $1,500 $750 honey) Tanks (for storing raw honey) $1,000 $770 During the 2019/20 income year, the following transactions occurred: a) The labelling machine was sold on 21 February 2020 for $2,500, b) 40 storage racks were purchased for $1,450 on 4 August 2019. They were used to create a new pool for depreciation purposes. c) The honey extractor was sold on 14 June 2019 for $2,700. A new, larger honey extractor was purchased in the same month for $3,500. d) A new laptop computer was purchased for the business on 20 March 2020 for $2,300. e) 50 new crates were purchased on 19 December 2019 for $900. Theo and Gina are not sure whether to add these to the existing pool, or to depreciate them separately for the 2019/20 income year. Required: Calculate the annual allowable depreciation deductions for Theo and Gina for the year ended 2019/20 income year. Required: Calculate the annual allowable depreciation deductions for Theo and Gina for the year ended 31 March 2020, assuming that they wish to maximise the amount they can legally claim for depreciation for tax purposes. Your answer should include any adjustments made upon the disposal of any assets during the year. Round your answer to the nearest dollar. The IRD depreciation rates are outlined in the following table: Item Diminishing Value Depreciation Rate (%) Beekeeping equipment 16 Labelling machine 13 Honey Extractor 13 Crates 40 Tanks 10 Storage Racks 10 Computer 50 Straight Line Depreciation Rate (%) 10.5 8.5 8.5 30 7 7 40 [TOTAL OF 15 MARKS ***************