Timexa Limited provided the following details with respect to its fixed assets
for the year of income 2005.

1. Building
Sh.
Class I
Sh.
Class II
Sh.
Class III
Sh.
Class IV
Sh.
1,400,000 460,000 610,000 800,000 6,200,000
2. The industrial building had been constructed sometimes back in 2000 at a cost
of Sh.1,600,000. Fixed machines were Sh.2,000,000. Due to an oversight, no
investment deduction was claimed.
3. During the year the following assets were purchased:
– Patents Sh.200,000
– Computers Sh.390,000
– Stamping machine Sh.800,000
– Land Sh.530,000
4. A car for use by the directors was involved in an accident and written off. No
recoveries were made.
5. In December, all computers were sold as one lot for Sh.1,220,000.
6. Assume 60% as the rate of investment deductions. For year 2000.
Required:
(i) Capital allowances for Timexa Limited for year of Income 2005. (15
marks)
(ii) Comment on the error resulting from non-claim of investment deduction.
( 4 marks)