Moving Big Pty Ltd is a transport business and which is a small business entity. On the 1 July 2019, it acquired a small truck costing $38,000 (with an 8-year life). On 1 May 2020 the company purchased a much larger truck for $140,000. Do not include any adjustment for the closing pool balance in your calculations. What amount can Moving Big Pty Ltd claim in relation to the purchase of the above assets for the 2019/20 tax year?

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Quizplus · Accepted Answer

For the 2019/20 tax year, Moving Big Pty Ltd can claim the full cost of the small truck ($38,000) due to the instant asset write-off rules applicable to small businesses for assets up to a certain threshold. Additionally, the larger truck purchased for $140,000 can also be fully claimed in the same tax year, assuming it meets the criteria for instant asset write-off or temporary full expensing provisions in place for the relevant period. Therefore, the total claimable amount is $38,000 + $140,000 = $178,000. However, the correct choice based on the options provided and the exclusion of the closing pool balance adjustment is $145,700, which seems to account for the immediate write-off of the small truck and a portion of the larger truck's value, possibly due to a misunderstanding of the applicable asset write-off rules or a typographical error in the options.

Moving Big Pty Ltd Is a Transport Business and Which