Wardaddy ran a successful military machinery factory and during the year purchased some additional plant and equipment for the business.

He traded-in or scrapped several of the older pieces of equipment.

Wardaddy ran a successful military machinery factory and during the year purchased some additional plant and equipment for the business. He traded-in or scrapped several of the older pieces of equipment. The details of his existing plant and equipment and transactions during the year are as follows: Existing Plant and Equipment (use this information to create the 2017 schedule eg Office Furniture OAV for 2017 is $1500) Purchase Date Item Cost OAV 1/07/PY 1/07/PY 1/07/PY 15/09/PY 1/05/PY 1/05/PY 1/05/PY 1/05/PY Office Furniture Machine A Machine B Motor Vehicle* Machine C* Machine D Carpets Computer * 4,200 15,000 6,000 18,000 7,000 12,500 5,700 2,500 1,500 7,400 3,000 16,575 5,000 12,082 5,319 1,865 Rate using DV method 40% 20% 20% 25.0% 10.0% 20% 40% 40% Note plant marked with * is sold/scrapped (see below) New Plant and Equipment Purchase Date 19/09/CY 15/12/CY 3/03/CY 4/4/CY 5/5/CY 7/6/CY 18/6/CY Item Computer Office Safe Display Cabinet Display Racks Laptop Cash Register New Motor Vehicle (actual price) Cost 3,790 1,920 8,000 1,000 1,580 3,220 55,000 Sale/Scrapping of Plant and Equipment Effective Life 3 30 5 3 3 5 8 Sale Date 19/09/CY 31/01/CY 18/06/CY Item Computer broke down and could not be fixed Sale of Machine C Motor Vehicle used as a trade in on new car Sale Price 0 $10,000 $8,000 What you should do to prepare for the online test a) Calculate the deduction for depreciation using Schedule A for Wardaddy (he does not want to use any pooling). b) Calculate any balancing adjustments that need to be included in Wardaddy's taxable income c) Re-do the question assuming now that Wardaddy is an SBE taxpayer and wishes to use pooling. The opening pool balance value is equal to the OWDV of the existing plant and equipment tabled above. d) Provide the legislative references from the Income Tax Assessment Act 1997 and 1936