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New Topic  
Mugo Mugo
wrote...
Posts: 6
Rep: 0 0
5 years ago
Gwaya and Company Limited was incorporated in 2016 but did not start business until 1January 2017 when the company commenced the business of processing tea. The following details related to the acquisition of fixed asset in the year 2017:
Sh.
Land and Building                                                                  6,500,000
Plant & machinery                                                                  4,000,000
Motor Vehicle – 2 saloon cars                                                2,000,000
Tractor                                                                                     5,000,000
Lorry (2 tons)                                                                            2,500,00
Furniture & Fittings                                                                   600,000
Construction of drainage                                                            150,000
Fencing of farm                                                                            50,000
Farm House                                                                                600,000
Irrigation System                                                                       750,000
Labour Quarters                                                                      1,200,000
Computers                                                                                  220,000
Milking Machinery                                                                    300,000


The following further information is provided
1.  The company kept 10 cows and constructed a cattle dip worth Sh. 400,000 for the animals during this year.
2.  Included in land and building is the cost of land valued at Sh. 2,000,000.
3.  One saloon car was disposed of for Sh. 500,000 which was half the cost price.
Required:
Capital deductions for Gwaya and Company Limited for the year of income 2017    (14 Marks)
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Educator
5 years ago
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