RIP Pty Ltd: Tax Implications of Funeral Services and Related Activities

This case study examines the tax implications of RIP Pty Ltd, a company providing funeral services and related activities. It analyzes the application of the Arthur Murray principle to the company's accounting treatment of amounts in Easy Funeral Plan, the tax treatment of forfeited payments, and the classification of caskets and accessories as trading stock. The study also explores the Commissioner's and taxpayer's choices in accounting methods and the adjustments required for tax purposes.

TAXATION

Table of Contents
Introduction......................................................................................................................................3
Part A...............................................................................................................................................4
a) Refer to the decision in Arthur Murray (NSW) Pty Ltd v FCT (1965) 114 CLR 314. In your
own words, briefly describe the facts, issues and conclusion in that case.......................................4
Advise RIP Pty Ltd when income is derived (i) generally, and (ii) when it derives its income
from funeral services and related activities. HI6028 Taxation Law Theory and Practice T1 2018 5
Does the Arthur Murray principle apply to the company’s accounting treatment of amounts in
Easy Funeral Plan? Explain.............................................................................................................6
Does the Commissioner or any taxpayer have a choice in the method of accounting for tax? b)
Advise the company of the tax treatment of $16,200 in ‘Forfeited Payments Account’ in item (iv)
.........................................................................................................................................................8
Part B...............................................................................................................................................9
Refer to appropriate sections of the legislation and relevant case law the nature of trading stock,
generally, whether the caskets and accessories would be trading stock for tax purposes and how
the amount of $25,000 is treated for tax purposes. What adjustments (if any) should be made to
the company’s reported profit for tax purposes in regard to items (b), (c) and (d).......................9
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................12

Introduction
Taxation is one of the important aspect in the functioning of the government. It is the revenue
that is being collected by the tax officials from the citizens and is being provided to the
government. Every activity that is being undertaken takes into account tax into it. It is in excess
of the maximum retail price. When the activities of the organization are being undertaken books
of accounts are to maintained which would help in providing the accurate numerical at the time
is being asked by the respective authority. Income and the expenses can be ascertained by the tax
authorities at the point of assessment of tax. It is the responsibility on the part of the organization
to initiate the proceedings of the management in the long run. Once the activities are getting
undertaken by accountability, it has to get maintained by the management which would help in
initiation the taxation policies to the respective authorities.

Part A
a) Refer to the decision in Arthur Murray (NSW) Pty Ltd v FCT (1965) 114 CLR 314. In
your own words, briefly describe the facts, issues and conclusion in that case.
Tax is one of the important aspects in the course of proceedings of income. It is the income
which is to be paid at the stipulated time period to t he assigned person. The person who pays the
tax is known as the assessor and person to whom the payment is to be made is known as
assessee. Income Tax Authority is assigned with the responsibility to keep records of the same
and provide the details to the government at the end or the accounting year or when the
government asks for the same. It is the liability on the part of the officials to provide the detail s
regarding the transaction that is being undertaken. In Aurther Murray Pty Ltd vs FCT there is
the inclusion of five different cases from different years. In each of the cases payment had been
due which resulted in default on the part of the tax payment. It was negligent on the part of the
tax officials as the functions on their part could not be undertaken in the smooth manner.
Responsibility lies on the part of the officials to rise to the occasion, which would help in
providing solutions to the problem that has arisen in the occasion (McCormick, 2017).
In the first instance it is the situation of tuition wherein a certain sum of money is to be provide
to the tuition heads who would provide the services in the firm of providing study lessons. But
the situation arose wherein the syllabus could not be completed in the due course of ti e . It
resulted in refund of the amount that had not been met. Rather, the situation was some thing
different wherein amount was not refunded to the students. It led to tax evasion on the part of the
officials. It is the responsibility on the part of the officials to provide the due.
In other cases there was negligence on the part of the tax payer as to the payment of taxes. In
cases of tax assessment information is to be provided to the parties in the written form. It results
in effective initiation of the proceedings in the significant manner.
In this scenario RIP Pty ltd is a company providing insurance services to the consumers . Once
insurance has been undertaken it is the responsibility on the part of the insurer to provide the
insurance premium at time that has been prescribed. Negligence on the part would result in
default on the part of the insurer. It can result in the unavailability of services on the part of the
officials. Tax is to be paid at the respective time period.

Advise RIP Pty Ltd when income is derived (i) generally, and (ii) when it derives its income
from funeral services and related activities. HI6028 Taxation Law Theory and Practice T1
2018
Tax is that part of the amount which keeps on fluctuating all the year round. In order to assess
the record assigned authorities are being prescribed by the government to ensure transparency in
the initiation of the proceedings. According to Tax Authority, it is the responsibility on the part
of the government along with the tax expert to initiate the proceedings of the happenings in the
noteworthy mode. In order to confirm that the activities are getting undertaken by the
government in the momentous way feasibility measures are getting undertaken by management
in the noteworthy mode. Flexibility in the operational activities of the organization is to be
undertaken in the prolific mode.
Tax slabs are being implemented by the governments, which provide the details as to the
assessment policy of the government along with the usage in the significant way. Initiatives are
getting undertaken by the management, in a periodic timeframe to initiate the proceedings of the
management in the organization. Credibility vests on the income feasibility of the tax operators
along with the tax payers (Radaelli, 2017). In the functioning of the tax policies, departmental
measures are getting undertaken by the management. Every year tax record is being checked by
the organization which would help in the initiation of the proceedings in the relevant way.
Income statement is to be provided half yearly and annually. Premium should be paid every
month and the assessment is to undertaken by the management at the half yearly and annual
respectively. Initiatives should be undertaken by the tax payers to keep track record of the initials
of the payments that are being undertaken by them at the yearend and half yearly.
A certain percentage of money is to be provided as the tax amount. It is the responsibility on the
part of the officials to provide the details as to the functioning that is getting undertaken on a
periodic timeframe by the government. In order to ensure transparency in the operation of the
activities tax officials are being assigned with the accountability to make the proceedings of the
management in an effective way. Every insurance that is being undertaken has certain terms and
conditions which can be initiated in the due course of time. Management undertook the policies

to ensure that the activities are made in the flexible manner. Initiatives should be supported with
valid solutions as to ensure that the functioning of the management carried out in the future.
Does the Arthur Murray principle apply to the company’s accounting treatment of
amounts in Easy Funeral Plan? Explain.
According to the accounting policies assessment year is that time of the year when the activities
related to tax is started for the accounting year. Every organization has to maintain books of
accounts, which provides the details regarding the functioning of the organization for the
relevant year. Books of Accounts provide the details regarding the income and the expenses of
the organization along with the details of the assets and the liabilities of the organization in a
specific way. It is the responsibility on the part of the tax officials to start the proceedings of the
organization in the substantial manner. Aurther Murray Principle although applicable at the
functioning of its own management but the activities cannot be resembled with the activities of
company. Company has to follow the principles that have been provide in the Memorandum of
Association and Articles of Association (Han et al., 2015).
It is not prevalent in the case of Aurther Murray. In order to function in the transparent manner
authorities have been assigned with the responsibility to get along with the proceedings of the
company. In this respect Executives of the organization have been given the accountability to get
along with the chronicles of the organization in the substantial way. Company is getting
performed in the hierarchical approach and is to be ascertained in the similar approach.
‘Board of Directors’ are allocated with the accountability to examine the organization’s
proceedings. In order to establish that the activities are getting undertaken by the management in
the substantial method, policies should get undertaken by the management, which will help in
the initiatiating the proceedings of the organization time and again. Incorporation and
Registration of the organization are important to get undertaken by the management in order to
run the business for the long run. When incorporation is being undertaken policies should get
adopted by the management, which will help the organization in the initiation of the proceedings
in the momentous way. These are the official proceedings, which are to be undertaken and
should get followed by the employees of the management in the significant way. Detailed

records of the organizational function should be provided in the annual meeting at the respective
periods. Management should undertake the policies of the organization and must initiate the
proceeding in a significant way. The organization must even undertake the developmental
measures and must allow it to get proceeded in a significant manner. (Cnossen, 2018). In order
to develop the momentum that is being prevalent in the functioning proactive measurers must get
undertaken by the management in order to make proper initiation of the proceedings (O'connor,
2017).

Does the Commissioner or any taxpayer have a choice in the method of accounting for tax?
b) Advise the company of the tax treatment of $16,200 in ‘Forfeited Payments Account’ in
item (iv)
To ascertain proper functioning of the management, the organization must undertake the policy
making in specific way, which will help the organization in solving the problems that are related
to the policy making, which the organization is already facing. Accounting includes the aspects
of providing information regarding the management functioning in the noteworthy manner
(Bankman et al., 2017). Tax payment is the right of the citizens and is to be provided in the
detailed manner. When the activities that are related to the organization are getting undertaken in
the noteworthy manner, any deficiency that are there in the functioning results in negligence on
the part of the payers of tax. It is relevant that the activities related to tax should be provided with
relevant guidelines (Moffitt, 2017). In case in any infringement forfeiture account may be
operated wherein tax amount is being forfeited and the company arrives at the original position.
In order to make sure that the activities are getting carry out in the significant way policies are to
be initiated, which will help the organization to make proceedings in a noteworthy way
(Ábrahám et al., 2016).
When forfeiture of account is being undertaken then credibility of the organization is being put
to question. It is the responsibility on the part of the company to ascertain the amounts related to
tax. Tax slabs are being formulated by the government are to be followed by the management in
the noteworthy mode (Apps and Rees, 2015).

Part B
Refer to appropriate sections of the legislation and relevant case law the nature of trading
stock, generally, whether the caskets and accessories would be trading stock for tax
purposes and how the amount of $25,000 is treated for tax purposes. What adjustments (if
any) should be made to the company’s reported profit for tax purposes in regard to items
(b), (c) and (d).
Stocks provide the basics that the company is in formulation. It is for every company to make
proceedings in an effective manner. When some activity is getting undertaken by the
management guidelines should be provided by the executive authorities of the organization
(Tanzi, 2014). In order to establish the functioning of the management, management must
undertake the developmental measures, which will help the organisation in the initiation of the
proceedings of the management in the significant way. Policies of the association acts as the
grundnorm and are to operate in the significant manner. In order to determine that the activities
are being undertaken by the management in the prolific manner, development are to be
undertaken which will help in the initiation of the proceedings (Brownlee, 2016).
Legal aspects are one of the important aspects in this regard. It takes into account the
proceedings of the organization. In case of legal scenario company law is to be studied in the
detailed mode along with the law of tort. Initiatives should be undertaken by the management in
the initiation of the facts of the case along with the relevance if any in the proceedings of the
case. In case of the functioning of the management provisions related to the infringement of law
are to be taken into account (Svoboda, 2016). It should take into account the policies of the
organization along with the possibilities of development in the future (Jaimovic and Rebelo,
2017). Contractual case is common in nature and can be initiated in the significant manner.
When there is breach of contract it leads to infringement of the policies of the management.
Breach of contract is a serious offence and is liable to be penalised. When the personnel in
contract has been found guilty it leads to penalty provisions along with behind the bars prospect
(Pomeranz, 2015).

When tax is being maintained it has to be according to tax law. Every details regarding the
implementation of tax are provided in the functioning of the management. In order to implement
the policies that are made by the management, the policies of the organization should get
maintained. Trading account is to be maintained which provides the details regarding stock of
the organization. It includes different expense that got undertaken by the management in a
specific way. Polices should be undertaken by the management in maintaining details of the
trading account. Management should undertake the initiatives to initiate the proceedings of the
management in the noteworthy manner.
$ 25000 is the prepaid expenses that are being paid by RIP Pty ltd for the month of August. It is
the amount, which has been paid in advance. It can be adjusted in the forthcoming years. When
forfeiture of accounts is being undertaken policies should be such so as to reduce the amount that
is due for a particular point of time. In order to establish that the management functioning
policies should get undertaken taking into account transparency in the functioning. In this
context company has to formulate the policies taking into account the initiatives on the part of
the organization for the long run. When the organizational activities are being undertaken
initiatives are on the part of the organization in the implementation of the tasks at the ground
zero (Wallace, 2015).
When talking about the law of tort it is allied to the negligence on the part of the management
and is to be carried out in the significant manner. When the rights of the parties are infringed it
is the responsibility of the organization to initiate the proceedings of the management. Although
challenges are prevalent during the course of proceedings of the organization initiatives are to be
undertaken by the management in mitigating the issues in the significant manner. Common
responsibility lies on the part of the officials of the organization and is to be undertaken by the
management time and again. In order to ascertain that the activities are being undertaken by the
management accountability has to be maintained by the organization which would take into
account the policies of the management.

Conclusion
From the above study, it can be concluded that taxation plays an essential role in the
organizational functioning. When the activities of the organization are getting undertaken by the
management, auditing would help the organization in making proper initiation of the proceeding
in a significant way.
Initiatives should get undertaken by the management in order to provide transparency in the
organizational functioning of the task that is being undertaken by the management. Payment of
tax is to be undertaken by the organization in order help in the initiation of the proceedings in the
substantial manner. Measures are to be undertaken by the management in order to ensure
transparency in the functioning of the organization in the significant manner. For boosting the
functioning of the management for the long run, the organization must undertake the functioning
in a periodic timeframe. To gain momentum for the organization, the organization must
undertake the developmental policies.

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