Managment Accounting

Question 9
For the purpose of ITAA97 S40-175 the follow of a depreciating plus held by the taxpayer consists of two factors.
The first particle of cost is the setting provided by the taxpayer to h senior the addition, including incidental expenses incurred to acquire the assets (eg stamp duty): 40-185, and
The due south base element of cost is Generally the consideration provided by the taxpayer to shoot down the asset to its prove condition and location since the entity commenced to hold the asset: s 40-190

In terms of Xin Lee Wools purchase of a parvenu dye auto, the following observations can be do:
The purchase price of the clean machine of $270,000 would be include as a first element cost of the newfound machine (s40-185)
The removal cost of the old machine of $4,000 would not be included as a first element cost of the new machine because it was not a cost incurred to hold the new machine (s40-180). Moreover, the removal cost of the old machine would not be included as a second element cost of the new machine as it does not contribute to the new machines present condition and location (S 40-190)
Normally, the depreciable assets cost does not include the cost of structural alterations to a building utilize to house the depreciable asset.



But where special foundations are needed and work an integral part of an assets function the cost of strengthening the beautify ($5,700) could be included as a second element cost of the new machine as it contributes to the new machines present condition and location (s 40-190)
The insurance and enthrall costs of the new machine ($1,900) represent costs pay to bring the machine to its present condition and location and would be included as a second element sneak of the new machine (s 40-190)
The installation and testing costs of the new machine ($5,350) would be included as a second element cost of the new machine (s 40-190) because they contribute to the new machines present condition.

Accordingly, the cost of the...If you want to keep a full essay, order it on our website: Orderessay



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