Galway Industries Pty Ltd Manufactures Musical Instruments - Management Assignment Help

Assignment Task:

Task:

Question 1 - Capital Allowances
Galway Industries Pty Ltd manufactures musical instruments. Due to a need to expand its business operations the company decided to build a bigger factory. You have been provided with the following information:

•  Construction commenced on 4 July 2017
•  The cost to build the factory was $4,000,000
•  The Occupational Health and Safety inspector examined the building on 15 December 2017 and approval to commence manufacturing was given.
•  The company installed all the equipment necessary for manufacturing on 16 December 2017 and the manufacturing operations commenced on 31
• December 2017.

Required:
(a) Is the building depreciable. Give reasons for your answer (1 mark)
(b) What type of expenditure is the $4,000,000 to build the new factory. Give reasons for your answer (1 mark)
(c) Advise the company what deductions (if any) the company can claim in respect to building this factory. In answering this question determine what type of deductions the taxpayer may qualify for and calculate the amount the taxpayer might be able to claim in 2017/2018 financial year. (3 marks)

Question 2 - Capital Gains (9 marks)
Tanishka purchased a main residence in March 2012 consisting of 16 equal rooms at a cost of $400,000. Four rooms had been exclusively used to run her medical practise. Tanishka sold the property to another medical practitioner in January 2018. The sale price was $1,000,000. She also received an additional $50,000 from the purchaser for agreeing not to operate another medical practice within 5 kilometres of the property.

During the year ended 30 June 2018 Tanishka also sold the following CGT assets She sold the following shares. The details were as follow:
1000 Bamboozle Ltd shares
Date acquired: 1 July 2017 $20,000
Date sold: 23 May 2018 $37,000
1000 Skulduggery Ltd shares
Date acquired 17 May 2003 $141,000
Date sold 1 April 2018 $ 74,000
Rare manuscript
Date acquired 1 May 2002 $19,000
Date sold 12 September 2017 $11,000
Medical Trolleys which was a depreciable asset
Date acquired 13 September 2012 $6,000
Date sold 12 September 2017 $1,000
Required
(a) Identify the CGT assets and advise Tanishka of the capital gains tax consequence in respect of the above CGT-assets (include calculations of gains or losses if any). Give reasons for your answers (6 marks)
(b) Calculate the net capital gain / capital loss Tanishka made on disposal of the above CGT-assets (2 marks)

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