1 The tax written-down value of plant and machinery brought forward from the year of assessment 2015/16 is as follows: 30% pool 20% pool 60,000 80,000 2 Movements of plant and machinery in the year ended 31 March 2017 were as follows: iOne motor van (AA 30%) costing $250,000 in 2010 was sold for $28,000. A new motor van was purchased for $300,000 and was put into use. no-b ii The 30% pool included another motor car which was bought in June 2014 for $200,000. Starting on 1 April 2016, the car was used partially by Mr Yeung's son for non-business use. The portion of non-business use has been agreed with the IRD to be 50% The estimated market value of the motor car on 1 April 2016 was $80,000. iii Mr Yeung inherited his father's business and took over some office furniture (AA 20%) for use in his own business. The tax written-down value of the furniture was $8,000 at the date of cessation of his father's business. iv Old equipment which was included in the 20% pool was damaged in a fire. The equipment was insured and Mr Yeung received $10,000 compensation from the insurance company. The equipment was originally bought for $9,000 a year ago. 18 v A machine used directly in manufacturing was acquired on hire-purchase terms in June 2016. The hire-purchase contract stipulated that a down payment of $32,000 was to be paid on delivery of the machine, followed by 12 monthly instalments of $10,000. The down payment was made in June 2016, with the first monthly instalment to start from 15 July 2016. If the machine had been bought on cash-on-delivery terms, the price would have been $140,000. for n Required a Based on the relevant provisions in the Inland Revenue Ordinance and Inland Revenue Rules, compute the depreciation allowance for Mr Yeung's business for the year of assessment 2016/17. 201 (23 marks) b Other than plant and machinery, the Inland Revenue Ordinance also grants a depreciation allowance for industrial buildings. Compare the depreciation allowances in respect of industrial building and plant and machinery. Identify and briefly explain two differences and two similarities between the two types of depreciation allowances.