Australian Taxation Law

Australian Taxation Law

TABLE OF CONTENTS
QUESTION ONE.......................................................................................................................4
QUESTION TWO......................................................................................................................4
QUESTION THREE..................................................................................................................5
QUESTION ONE.......................................................................................................................6
QUESTION TWO......................................................................................................................7
QUESTION THREE..................................................................................................................8
SECTION A.............................................................................................................................10
QUESTION 1...........................................................................................................................10
QUIESTION 2.........................................................................................................................10
Part A..................................................................................................................................10
Part B...................................................................................................................................12
QUESTION 3...........................................................................................................................13
a)..........................................................................................................................................13
b)..........................................................................................................................................14
QUESTION 4...........................................................................................................................15
Part A..................................................................................................................................15
Part B...................................................................................................................................16
QUESTION ONE.....................................................................................................................18
QUESTION TWO....................................................................................................................19
QUESTION THREE................................................................................................................20
QUESTION ONE.....................................................................................................................21
QUESTION TWO....................................................................................................................22
QUESTION THREE................................................................................................................24
QUESTION ONE.....................................................................................................................25
QUESTION TWO....................................................................................................................26
QUESTION THREE................................................................................................................27

REFERENCES.........................................................................................................................29

QUESTION ONE
Particulars Amount Amount
Net profits of the company 3419700
Add: Dividend received
(240000*80%) (ITAA 1997
215(B))
48000
Cash dividend received and
tax paid
Nil
Wages (Overpayment of
expense for wages)
30000
3497700
Depreciation and other
expenses (ITCC 1997
(705(45))
Low-cost pool assets
(80000+17080)
9708
New motor vehicle
(17750/6)
2958.33
I-pad 330
Delivery van (74232/5) 14846.4
Actual cost for accident
claim
25000
New steel window frame 840
Painting of the premises 10000
Stock (230000-33567) 196433
Goodwill expense 100000
PAYG installments paid 955000
Purchase of building Nil 1315115.73
Taxable income of the
company
2182584.27
The tax liability for the company will be 27.5% as the turnover of the company is less $10
million (Edmonds, 2019). So, the tax to be payable by the company for the period of 2016-17
is $2182584.27 27.5% = $600210.67.
QUESTION TWO
Sam 's tax liability for the year ended 30 June 2017
Receipts
Professional fees
20000
0
Sales of do it yourself wills 25000
Income from part time military services (exempted income) 0
Dividend received from an Australian resident company fully
franked 7000

Net salary received from part time job 24000
Interest on bank deposits 5000
Rental income from an investment property 10000
Profit on sale of office equipment 2000
Gambling wins
50000
0
Total
77300
0
Payments
Office rent 14000
Cost of do it yourself 10000
salary paid to employee secretary 50000
Purchase of new calculator 290
Cost of meals and entertainment for clients 1400
Train fares for travel to and from work 1200
Rates on family home 2200
Tax agent's fees for preparing returns 1000
Rate paid on above mentioned investment property 2000
Interest paid on loan 15000
Cost of painting the investment property after purchase 5000
Cost of replacing roof tiles on the investment property 1000
Cost of extending the bathroom in investment property 15000
Maintaining Sam’s father Myron 5000
Total
12309
0
Gross income
64991
0
Taxable payable 30% of profit
19497
3
Less: Carried forward losses 12000
Net tax payable
18297
3
QUESTION THREE
Sue’s tax payable for the income year ending 30 June 2017
Annual salary from part time job 60000
Add: Net capital gain (Note 1) 15500
Net taxable income 75500
Income tax payable (Note 2) 16084
Medicare levy payable 1510
Income after tax & Medicare levy 57906
Note 1:

Capital gain 170500
Capital loss 35000
Total Capital gain 135500
Less: unabsorbed capital loss 120000
Net capital gain 15500
Note 2:
This means for an annual income of $75500 Sue pay:
No tax on income between $1 - $18,200 0
19c for every dollar between $18,201 - $37,000 3572
32.5c for every dollar between $37,001 - $90,000 12512
Income Tax payable 16084
QUESTION ONE
Fees received 13011492
Operating expenses
Advertising 1100000
Accounting depreciation 755000
Fringe benefits tax 45000
Provision for unreported claims 150000
Provision for bad debts 143000
Repairs 430000
Wages and Salaries 7400000
Purchase of trading stock 920000
Superannuation for employees 893000
Total operating expenses 11836000
Cost of buying the goodwill of a business 400000
Net profit 775492
Particulars Amount Amount
Net profits of the company 775492
Add: Dividend received
(100000*100%) (ITAA 1997 215(B)) 100000
Cash dividend received and tax paid Nil
Wages (Overpayment of expense for
wages) 20000
895492
Depreciation and other expenses
(ITCC 1997 (705(45))