Taxation Law Tutorial 9 Assignment Solution - LAWS3101 Brisbane

This assignment solution addresses the LAWS3101 Taxation Law Tutorial 9, focusing on the tax implications for Sue-Ann Brown's bookstore business. The solution calculates Sue-Ann's taxable income, considering sales revenue as assessable income, and details allowable deductions like cost of goods sold, donations, depreciation, wages, and various business expenses. It applies relevant sections of the ITAA 1997, such as section 6-5 for business receipts and division 30 for deductible gifts. Additionally, the solution computes the total GST payable by Sue-Ann, considering receipts, expenses, and input tax, providing a comprehensive understanding of her tax obligations. The assignment includes a detailed breakdown of the calculations, providing a clear understanding of taxation principles.

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

1TAXATION LAW
Table of Contents
Answer to question 1: Tutorial 9................................................................................................2
Answer to A:..........................................................................................................................2
Answer to B:..........................................................................................................................3
References:.................................................................................................................................5

2TAXATION LAW
Answer to question 1: Tutorial 9
Answer to A:
According to the “section 6-5, ITAA 1997” business receipts are treated as gain that
is considered as ordinary income. The court in “Scott v FCT (1935)” held that receipts
should be determined in agreement with ordinary concepts of “section 6-5” to treat it as
assessable income (Woellner et al., 2016). The sales revenue derived by Sue-Ann is treated as
taxable business receipts under “section 6-5, ITAA 1997”.
As held in “Arnold v FCT (2017)” gifts or contribution greater than $2 that is made
to deductible gift recipient is allowed for deduction under “division 30 of the ITAA 1997”.
The gift to library is deductible for Sun-Ann under “division 30 of the ITAA 1997”
(Barkoczy 2016). The court in “Ronpibon Tin v FCT (1949)” required the tax payers to
apportion the expenditure that has dual purpose. Similarly, expenses incurred by Sue-Ann is
only allowed for deduction under “section 8-1, ITAA 1997” for the business use proportion
while the remaining 40% is private portion and non-deductible.
Under “section 40-25 (2)” an entity is allowed to deduct the decline in value of
depreciating assets that is attributable for business use. The depreciation for computer used
by Sue-Ann is only attributable for business proportion.
The general business expenses and staff wages is allowed for deduction under
“section 8-1, ITAA 1997” because the expenses were incurred by Sue-Anna in the ordinary
course of business.
The taxable income of Sue-Anna is given below;

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In the books of Sue-Ann Brown
For the Year ended 2018/19
Computation of Taxable Income
Particulars Amount ($) Amount ($)
Assessable Receipts
Sales Revenue 2,38,500
Total Assessable Income 2,38,500
Allowable Deductions
Cost of goods sold (Op Stock + Purchase) - Closing Stock
1,74,000
Donation to state library
8,000
Depreciation for Computer (60% Business use)
358
Depreciation for Printer
68
Car Running Expenses -
997
Wages to casual staff
16,000
Insurance expenses
2,500
Electricity Expenses
2,000
General Business Expenses
1,380
Total Allowable Deduction 205303
Total Taxable Income 33,197
Answer to B:
Calculation of Total GST Payable or Refundable
For the year 2018/19
In the books of Sue-Ann
Particulars Price (Ex GST) Input Tax Net Receipts/Payment
Receipts
Receipts from Sales 2,16,818.18 21,681.82 2,38,500.00
-
Total Receipts 21,681.82 2,38,500.00
Expenses Allowed as deductions
Purchase of Stock 1,71,818.18 17,181.82 1,89,000.00
Purchase of Computer 1,090.91 109.09 1,200.00
Purchase of Printer 227.27 22.73 250.00

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Fuel 463.64 46.36 510.00
Registration 290.91 29.09 320.00
Licence Fees 151.82 15.18 167.00
Stationary and Printing Expenses 527.27 52.73 580.00
Advertisement Fees 727.27 72.73 800.00
Insurance 2,272.73 227.27 2,500.00
Total Expenses 17,757.00 1,95,327.00
Total GST Payable 3,924.82
The total amount of GST-Payable by Sue-Ann Brown for the year ended 30th June
2018/19 stands $3,924.82.

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References:
Barkoczy, S., 2016. Foundations of taxation law 2016. OUP Catalogue.
Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation
Law 2016. OUP Catalogue.