Preparing and Administering Tax Documentation for Entities Name of the Student Name of the University Authors Note Course ID Assessment 1 - Written Test 2

Running head: PREPARE AND ADMINISTER TAX DOCUMENTATION FOR ENTITIES
Prepare and Administer Tax Documentation for Entities
Name of the Student
Name of the University
Authors Note
Course ID

PREPARE AND ADMINISTER TAX DOCUMENTATION FOR ENTITIES1
Table of Contents
Assessment 1 – Written Test......................................................................................................2
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................4
Answer to question 3:.................................................................................................................4
Answer to question 4:.................................................................................................................5
Answer to question 5:.................................................................................................................5
Answer to question 6:.................................................................................................................6
Answer to question 7:.................................................................................................................6
Answer to question 8:.................................................................................................................7
Assessment 2:.............................................................................................................................8
Case 1:....................................................................................................................................8
Requirement A:......................................................................................................................8
Requirement B:......................................................................................................................9
Case 2:..................................................................................................................................10
Assessment 3:...........................................................................................................................11
Task 1: Computation of Section 90 Partnership Net Income...............................................11
Answer A:............................................................................................................................11
Answer B:.............................................................................................................................11
Task 2: Individual Tax Return:................................................................................................11
References:...............................................................................................................................13

PREPARE AND ADMINISTER TAX DOCUMENTATION FOR ENTITIES2
Assessment 1 – Written Test
Answer to question 1:
The four main business structures that is most commonly used by the small business
in Australia are as follows;
Sole trader – An individual that is trading on their own.
Partnership – There are number of people or entities that is running the business together
but does not include a company (Barkoczy 2016).
Company – A company includes the legal entity that is different from its owners.
Trust – An entity that holds the property or income for the others benefit.
Advantages and Disadvantages of Sole trader:
Advantages:
a. Unlike the other business structures, beginning a sole proprietorship needs less
paperwork and time to form a legal sole trader.
b. Sole trader gets the tax benefits (Freudenberg et al. 2017). The sole trader is imposed
tax based on individual tax rates instead of corporate rate which makes it simpler and
cheaper to adhere with the tax regulations.
Disadvantages:
a. Owners are completely liable for the overwhelming debts of business and this will
impact the owner’s finances. When the sole trader fails to pay the debts all the savings
and assets can be used to meet the debt obligations.

PREPARE AND ADMINISTER TAX DOCUMENTATION FOR ENTITIES3
b. Raising the capital is considered difficult (Sadiq 2019). Initial business is produced by
owners and raising funds for business can be considered difficult because they do not
use stocks or other kind of investment income.
Advantages and Disadvantages of Partnership:
Advantages:
a. The business would have higher amount of capital available
b. Higher capacity to borrow
c. Easy to change legal structure of business if situation arises
Disadvantages:
a. There are possibilities of risks related to disagreement and frictions amid the partners
and management
b. If the partners leave or join, the valuing all the assets of the partnership becomes
costly.
Advantages and Disadvantage of Company:
Advantage:
a. The liability of shareholders is limited
b. The rates of taxation are very much favourable
Disadvantage:
a. The profits that are distributes to the shareholders are considered taxable
b. The requirements relating to reporting is complex
Advantages and Disadvantages of Trusts:
Advantages: