Taxation Law Case study on RIP Pty Limited

Taxation Law
The Case RIP Pty Limited
Submitted to:
Submitted by:
Date:

7
Taxation Law
Table of Contents
Page No
Introduction
Part A
Facts, issues, and conclusion of the case of Arthur Murray
When does RIP Pty Limited derive its income generally?
RIP Pty Limited derives its income from funeral services and related activities?
Advice on the treatment of the Forfeited Payments Accounts
Part B
Trading stock ($25,000)
What Adjustments to Items b, c, & d
Fully Franked Dividend
The lease and Rent
The Service leaves
What deduction for the expenditure of item e
References

7
Taxation Law
Introduction:
According to the requirements of the laws, a taxpayer is required to compute its relevant
assessable income for income tax purposes for the applicable financial period. Business
organizations, record all income relevant to specific business activities are recorded in
the specific accounts on accruals basis. The business activities as sale of goods, and
revenue from the services are main activities those need accrual basis accounting
treatment. The principle of accrual has significant impact on the business activities
having earned and unearned income portion. The business involved the professional
practice derives its assessable income on the annual basis, income is derived when the
person invoice the amount or earned it actually. The taxpayer needs to review the
income in accrual basis to transfer the earned portion of the unearned income to make
them assessable income for the tax calculations (Year-end tax planning toolkit, 2016).
Unearned income, normally, treated as deferred income; many companies in the past
failed to properly report the derived income for tax purposes and eventually, faced the
lawsuit. There is various Court judgments stated that business organizations failed to
apply requirements of law to fairy report their taxable income. It has significant
importance to recognize whether an amount earned and unearned income has reported
as required. Till 30 June 2016, small business enterprises, having less than $2 million
turnovers, taxed at rate of 28.5% but after 1 July 2016, they are being taxed at 27.5% if
having a turnover less than $10 million as Australian Government announced in the
budget (Tax Summary, 2017).