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(solution) Question 1 Abyan had a taxable income of $38,300. Calculate her


See the attachment,this is Australian taxation.Please help.


Question 1

 

Abyan had a taxable income of $38,300. Calculate her net tax payable including

 

Medicare levy.

 

Question 2

 

Clive Clumsy was injured during his employment, and for the first 10 weeks after the

 

injury he received $400nper week compensation. A Supreme Court judgment awarded

 

him $71,000 for the injury. This was made up as follows: $26,000 being loss of pay of $1,000 per week for 26 weeks to date less the

 

$400 per week for the first 10 weeks already paid $5,000 being payment for hospital and medical expenses incurred $30,000 for reduced working capacity in future $10,000 for pain and suffering

 

Clive has other income of $12,582. Calculate his taxable income and net tax payable

 

including Medicare levy.

 

Question 3

 

Maggi had the following income and deductions

 

Salary

 

Re-imbursement of work related km travelled

 

Interest

 

Army Reserve Income

 

Expenses which are fully deductible for tax purposes $

 

25,000

 

1,900

 

1,000

 

2,500

 

2,800 Calculate her taxable income and net tax payable for the current year including

 

Medicare levy

 

Question 4

 

Tina bought a block of land in October 1984 with the intention of eventually building

 

a holiday house. After being transferred to another state she sold the block in the

 

current year and made a gain of $64,000. Is the gain of $64,000 assessable income.

 

Question 5

 

Luke sold the following assets during the current year.

 

Asset

 

Asset1

 

Asset 2

 

Asset 3 Cost Base

 

10,000

 

10,000

 

10,000 Reduced CB

 

10,000

 

9,000

 

9,000 Capital Proceeds

 

15,000

 

8,000

 

9,700 Work out his CG or CL.

 

Question 6

 

Darren consulted his accountant Mr. Gough regarding the purchase of a holiday home.

 

The cost of his advice was $500 in September 1991. In addition he paid stamp duty of

 

$3,150. This was paid in October 1991.

 

Darren used a loan to acquire the property and paid $250nstamp duty on the loan in

 

January 1992. The property was sold in September CY for $280,000. Costs associated with the sale include commission of $6,750 paid to the real estate salesman who sold

 

the property and advertising of $600. Both these expenses were paid in September

 

CY.

 

Incidental costs

 

$

 

Accountant?s advice

 

500

 

Stamp duty on property

 

3,150

 

Stamp duty on loan

 

250

 

Commission on sale

 

6.750

 

Advertising cost

 

600

 

He further incurred the following expenses into his property

 

$

 

Interest on loan

 

25,000

 

Insurance cost over the period of ownership 3,500

 

Repair to stairs

 

1.800

 

Rates and land tax paid

 

6,900

 

Interest of $3,000 was paid since October 1996 when Darren obtained a personal loan

 

to refurbish the kitchen and bathrooms at cost of $25,000

 

In December 1994, Darren?s next door neighbor, Mark Taylor, disputed the placement

 

of fence and considered that some of the land on Darren?s side of the fence was I n

 

fact his land. It cost Darren $2,000 in various fees and cost to prove that the fence was

 

correctly placed. Mark did not pay any of Darren?s costs

 

Calculate Darren CGT.

 

What if the holiday home was sold for $180,000 ?

 

Question 7

 

The Jack and June partnership provides accounting services to the general public. The

 

gross fees of the partnership were $210,000 in the year ended 30 June 2014. The

 

partnership employs three people and paid them $30,000 each in salary for the year

 

and in addition paid superannuation contributions of $2,250 for each of the employees

 

into a complying superannuation fund. The partnership also paid $5,000 for each of

 

the partners into a complying superannuation fund. Jack was paid a salary of $30,000

 

from the partnership while June was paid a salary of $35,000. Jack had drawings of

 

$15,000 from the partnership during the year while June had $8,000. Jack had loaned

 

$60,000 to the partnership for three years for use as working capital at 8% interest per

 

annum and the partnership paid him $4,800 in interest during the year. The prevailing

 

commercial rate for business loan is 8%. The partnership had a net loss of $34,000 in

 

the year ended 30 June 2013. Based on the above information, what is the net income

 

of the partnership for the year ended 30 June 2014?

 

The net income of the partnership is calculated as if the partnership was a resident

 

taxpayer including the normal assessable amounts and deductions but not including

 

contributions for superannuation for the partners or carried forward losses. The

 

calculation is as follows:

 

Assessable income

 

Less: $210,000 Employee salaries paid

 

Super for employees

 

Interest on loan

 

Net income ? s 90 ITAA36 90,000

 

6,750

 

4,800

 

$108,450 Partners? salaries are not a deduction to the partnership and drawings have no impact

 

on the net income of the partnership. The loan by Jack to the partnership appears to be

 

on commercial terms and therefore the interest on this loan is deductible to the

 

partnership.

 

Question 8

 

Bill and Mary carry on a retail business in partnership. The financial statements of the

 

partnership for the year ended 30 June 2014 indicate an operating profit of $35,000

 

after paying a partnership salary of $60,000 to Bill. Bill and Mary have an equal

 

entitlement to the income of the partnership after the payment of salaries. The

 

following additional information relates to determining the net income of the

 

partnership:

 

Superannuation contributions by the partnership of $4,000 on behalf of Bill

 

have been claimed as an expense in determining the operating profit of the

 

partnership. An amount of $560 in speeding fines paid for Bill has been claimed as an

 

expense in determining the operating profit of the partnership. Mary withdrew $3,000 from the partnership bank account during the year to

 

pay for some dental surgery work for one of her children. This has been

 

claimed as an expense in determining the operating profit of the partnership. No depreciation has been deducted in determining the operating profit. The

 

amount of depreciation calculated under division 40 ITAA 97 was $5,000.

 

Based on this information what is the net income of the partnership for the year ended

 

30 June 2014? Question 9

 

The Tennyson Family Trust is a discretionary trust that carries on a retail business. It

 

had sales proceeds of $400,000, expenses when operating its business of $230,000

 

and it received a fully franked cash dividend of $7,000 during the year. What is the

 

net income of the trust for the current year?

 

Question 10

 

The Hayden Family Trust is a discretionary trust with three individual resident

 

beneficiaries. The following is a summary of the financial information necessary to

 

calculate the net income of the trust for the year ended 30 June 2014:

 

? Rental income from renting out residential property of $230 000. Related

 

allowable deductions were $76,000.

 

? Sale of a rental property on 14 May 2014 for $560 000 where the property was

 

purchased on 5 June 2000 for $410,000.

 

? Cash dividends of $21,000 received from Australian resident companies. All

 

dividends were fully franked.

 

? Interest income of $12,000 received during the year Question 11

 

Elizabeth purchased a truck (carrying capacity 10 tonnes) for use in her delivery

 

business for $67,000 on 1 September 2012. She uses the truck 100% for business use

 

at all times and is not using the Small Business Entity (SBE) method of depreciation.

 

The effective life of the truck at the time of acquisition was seven years. Her

 

depreciation claim (assuming diminishing value method applied and rounded to

 

nearest $1) for the year ended 30 June 2014 will be:

 

Question 12

 

Elizabeth purchased a truck (carrying capacity 10 tonnes) for use in her delivery

 

business for $67,000 on 1 September 2012. She uses the truck 100% for business use

 

at all times and is not using the Small Business Entity (SBE) method of depreciation.

 

The effective life of the truck at the time of acquisition was seven years. Her

 

depreciation claim (assuming prime cost method applied and rounded to nearest $1)

 

for the year ended 30 June 2014 will be:

 

Question 13

 

Bill is a self-employed electrician who primarily undertakes electrical repair work for

 

the public and at 30 June 2014 he had the following items on hand: Light fittings that cost $12,000 during the year ? he will separately charge for the

 

light fittings when completing a job.

 

Electrical cable that cost $3,000 ? he will use the cabling to complete his work but

 

will not separately charge an amount for the cable used in completing a job.

 

Nails and screws that cost $700 ? he will use these in completing his work but will

 

not separately charge an amount for the nails and screws used in completing a job.

 

Tools purchased during the year that cost $4,000 ? he will use these to complete

 

his work but does not hold them for resale. Assuming that Bill wishes to value his trading stock at cost price on 30 June 2014,

 

what value of closing stock should he choose?

 

Question 14

 

Noel carries on a business of forest operations and purchased land and trees for

 

$60,000 ($20,000 of the cost was attributable to the timber). During the current year

 

Noel fells all the timber and incurs $10,000 in felling and transportation costs. Noel

 

had no sales during the current year. Assuming that Noel wishes to value his stock on

 

Question 15

 

Kate carries on a business of manufacturing school playground equipment. In

 

addition, she also provides consulting services to schools about the type of

 

playground equipment to use. On 30 June 2014 she had raw materials on hand that

 

cost $23,000, partly finished goods on hand that cost $25,000 to get to their current

 

condition, finished goods on hand that cost $50,000 to manufacture and she has

 

unbilled consulting fees of $12,000. What is the value of her trading stock on hand at

 

30 June 2014, assuming that she wishes to value her trading stock at cost?

 

Question 16 A resident individual has earned salary and wages income of $18,000 and a fully

 

franked cash dividend of $19,600 for the year ended 30 June 2014. He had tax

 

instalments (PAYG) withheld from his salary and wages income of $3,000. He has no

 

dependants and is entitled to no dependant tax offsets/rebates. What is his net tax to

 

pay or his refund due (including Medicare levy but excluding low income tax offset)

 

when his assessment issues?

 

Question 17

 

Nicholas, an Australian resident individual for taxation purposes, received a fully

 

franked cash dividend of $1,260 from Hardware Ltd on 4 June 2014. What amount

 

should he include in his assessable income?

 

Question 18

 

Daniel, an Australian resident individual for taxation purposes, received a partially

 

franked cash dividend of $3,360 (franked to 50%) from Equity Ltd on 23 May 2014.

 

What amount should he include in his assessable income?

 

Question 19

 

Kate, an Australian resident individual for taxation purposes, received an un-franked

 

cash dividend of $7,000 from Unity Ltd on 25 June 2014. What amount should she

 

include in her assessable income as a result of receiving the dividend?

 

Question 20

 

Nicholas is a medical doctor who purchased an air-conditioner for his medical

 

practice. He is registered for GST and paid $1,650 (including GST) for the item. He

 

holds the tax invoice. What amount of GST can he claim as an input tax credit?

 

Question 21

 

Nicholas works for Computer Specialists Ltd as a salesman. He is provided with a car

 

that cost the company $45,000 on 1 May 2011. Nicholas used the car from the time

 

that his employer acquired the car. During the FBT year ended 31 March 2014

 

Nicholas travelled 35,000 km in the car. The car?s log book indicates that the business

 

percentage is 80%. Nicholas paid $2,000 of the operating costs for the year ended 31

 

March 2014. What is the taxable value of the car for the year ended 31 March 2014

 

using the statutory formula method?

 


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