Problem: FineFoods Pty Ltd (FineFoods) purchased a large retail and restaurant building on 1 April 2022. FineFoods immediately occupied the building to commence trading as a new Asian fusion restaurant and bar. The building was originally built in 2002 at a cost of $325 000. Construction commenced on 1 May 2002 and was completed on 12 November 2002.
FineFoods is classified as an SBE and applies the simplified depreciation rules. FineFoods made the following purchases on 1 April 2022 to commence business:
- coffee machine: $6 000
- industrial oven: $165 000
- freestanding preparation benches: $8 000
Required: Determine the following capital allowances FineFoods can claim in the 2021-22 income tax year.
(a) Capital works deduction
(b) Deductions on depreciating assets
Please round all calculations to the nearest whole dollar showing all workings and refer to relevant legislation to support your answer.