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Accounting For Income Tax: Assignment

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Added on  2020-04-01

Accounting For Income Tax: Assignment

   Added on 2020-04-01

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TAXATIONAccounting For Income TaxStudents' NameCourse Title Instructor’s NameInstitutional AffiliationCity and State Date of Submission
Accounting For Income Tax: Assignment_1
TAXATIONQuestion 1;Tony’s main source of income is from repair of gazebo as well as from sales of new manufactured gazebos. He therefore expects his income from the service rendered on repair and that from sales proceeds. He is expected to declare his income only after capturing all therelevant costs involved. It’s therefore very important to analyse income against costs and expenses so as to ascertain whether Tony’s income meets taxation threshold as per AustralianTax Office standards set in place.By look of things arithmetic analysis need to be done so as to give detailed break - down of revenue generation and respective costs associated as shown below;The Total Manufacturing Cost Per Gazebo is =Labour Cost = 70Material Cost = 80Factory Cost =100 Total Cost= 250Manufactured Gazebos Chairs Total Cost On 30th June=10*250=$2500Sold 6 chairs out of this 10 manufactured create sales revenue of=6*500=$30002015/2016 purchase was made of 5 second had Gazebos thus purchase value=5*$5=$25 this same value is what stands as the potential closing stock as at June 2016.3 chairs were purchased at cost =3*$10=$30 as at June 2017Assuming all the 8 chairs were sold=$20*8=$160Replacement cost of the 8 chairs=$15*8=$120From the above analysis we need to come up with income statement after net cost set off so as to define Tony’s taxable income.
Accounting For Income Tax: Assignment_2
TAXATIONAll the cost of sales items as well as their value qualifies for tax deductible policies since the revenue generated result from their costs.Cost Of Sales=Opening Stock+Purchases-Closing StockYear 2016 COS For the 5 second hand gazebos=0+$25-$25=0Year 2017 COS=$25(Opening Stock+$30(Purchases)-$35(Closing Stock )=$20$35(Closing Stock Valuation )=1 chair from the 5 bought 2nd hand=1*$5=$5+ =3 chairs bought at year end=3*$10=$30Tony’s Statement Of IncomeFor The Year End June 2017Sales revenue of the six chairs cold 6*500=$3000Sales revenue for the four repaired gazebo =$78Less Manufacturing cost of the 6 chairs sold=$250*6=$1500 Cost of sales of the repaired chairs =$20Replacement Cost Of 8 Chairs=$15*8 =$120Less Total Cost (=$1640) Net Profit before Tax $1438From the income statement above we are now certain that Tony’s business of selling the either newly manufactured or repaired Gazebos forms part of his source of income. Thesegazebos therefore forms part of Tony’s trading stock since they are seen to be manufactured or acquired for the purpose of the selling.
Accounting For Income Tax: Assignment_3

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