Kalamuka Maize Millers Limited purchased a building on 1 January 2005, for
Sh.4,000,000. It was brought into use on the same day. The sellers
construction cost comprised:
Sh.
Land
Architects fees
Leveling land
Construction (including offices
sh.160,000)
200,000
40,000
60,000
1,700,000
2,000,000
B.B. Ltd. purchased the whole of the Kalamuka Maize Millers Ltd. on 31
December 2005 and continued with the same business of milling maize. The
following amounts were paid for assets purchased.
Sh.
Goodwill
Land and buildings
Milling machines
10,000
4,000,000
1,800,000

Tractor and lorry
Motor vehicle
1,600,000
1,200,000

B.B Ltd. Incurred the following additional costs:
Sh.
Extension to building
Security wall
Additional boiler
New sorter and conveyor – fixed to fabric of
building
Fixtures and fittings.
800,000
100,000
1,000,000
1,200,000
600,000
B.B Ltd. sold some surplus assets as follows:

Date Particulars Sh.
1-7-2006
1-9-2006
1-9-2006
Milling machines
Damaged fixtures and
fittings
Lorry
200,000
8,000
180,000
B.B. Ltd’s financial year ended on 30 September 2006.
Required:
The capital deductions claimable for the year ended 31 December 2006.
(10 marks)