Fast Express Couriers Pty Ltd is a courier business but which is not a small business entity. On the 1 July 2019, it acquired two new vans each costing $22,000 (each with an 8-year life) and some office equipment costing $14,000 (5-year life) for 100% use in the business. What can Fast Express Couriers Pty Ltd claim in relation to the purchase of the above assets for the 2019/20 tax year?

Question

Quizplus · Accepted Answer

Fast Express Couriers Pty Ltd can claim depreciation on the assets it purchased for business use. The depreciation for the vans ($44,000 total cost) over an 8-year life is $5,500 per year. The office equipment depreciation ($14,000 cost) over a 5-year life is $2,800 per year. Adding these amounts gives a total claim of $8,300 for the vans and $2,800 for the office equipment, totaling $11,100. However, since the company is not a small business entity, it might not be eligible for simplified depreciation rules, which could affect the immediate write-off or pooling. Given the options and the standard depreciation calculation, none directly match the calculated total. The correct answer would depend on specific tax legislation and allowances for the 2019/20 tax year, which might include immediate write-offs or accelerated depreciation rates not accounted for in this calculation. However, based on standard depreciation without considering specific small business concessions or immediate write-off rules, the calculation error seems to have occurred, and the correct answer intended might be related to specific tax rules in place for the fiscal year that are not detailed in the question. Therefore, without specific tax legislation details or assuming an error in calculation, the provided explanation does not match the options, indicating a misunderstanding or a need for more specific tax rule application.

Fast Express Couriers Pty Ltd Is a Courier Business but Which