Answer to Question #60059 in Accounting for nazish quadri
new machine for $1.1m (inclusive of GST) which it used to produce the tin cans in
which its tennis balls were placed for sale to retailers. At the time of acquiring the
machine , Rubber Co estimated that the machine would have an effective life of 10
years before it needed to be replaced. Subsequently, on 1 January 2014, as a result
of new technology, a better quality machine became available and Rubber Co
decided to sell the original machine for $330,000 (inclusive of GST) and purchase a
new machine for $2.2m (inclusive of GST).
What are the tax consequences of these arrangements under Div 40ITAA97?
According to the tax consequences of these arrangements under Div 40ITAA97, taxes will be paid from the both purchases and one sell.
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