taxation acc3tax group report the assessment task requires students to correctly cal 582326

Aug 29, 2021 | Uncategorized

Taxation(ACC3TAX)

Group report

The assessment task requires students to correctly calculate taxable income, income tax payable and complete an income tax return for a mixed business/sub newsagency called ALLNews. It gives the students the opportunity to:

  • ??Demonstrate an understanding of legal principles and their application, specifically in relation to taxation and case law.

  • ??Interpret the relevant legislation and common law principles and make informed judgements on issues relating to the application of these as they pertain to sole traders.

  • ??Calculate taxable income and tax payable for a sole trader.
    In order to complete this task, students will be allocated to groups from within their tutorial.

Due Date:
Mark Allocation: Weighting:

Week 10Due by 5pm Tues 13 May (via turnitin on student portal) 100 Marks
15% of Total Marks

Julie Smith commenced a mixed business/sub newsagency called ALLNews at 45 Orr Street Numurkah on 1stJuly 2012. She makes an appointment with you to prepare her 2013 income tax return. At the interview she supplies you with the following financial information:

Receipts

NAB–Business Loan
Cash Sales Banked
Receipts from debtors (note 1 below)
Payments
Motor Vehicle Expenses (note 4, 7 and 8 below) Replacement of petrol engine–Holden (note 9 below) Power
Rates
Insurance
Telephone Expenses (note 5 and 8 below)
Bank charges
Repairs and maintenance (note 3 below)
Drawings
Wages and Salaries May
Entertainment Allowance (note 8 below) Superannuation Expense
Subscription to Vogue Magazine (note 8 below)
Loan repayment (note 2 below)

100,000 950,200 320,800

10,310 5,000 11,470 1500 11,250 1,700 1,590 2,290 16000 15,000 1,000 1,388 700 18,500

1

Fixed asset acquisition (note 6 and 8 below) Cash purchase–trading stock
Payment to creditors (note 1 below)

93,100 311,150 228,670

From the interview, and an analysis of the cash records and the working papers to last year’s return, you ascertain:

1. Year end reporting details

Debtors at 30 June 2013 Creditors at 30 June 2013 Stock on Hand 30 June 2013

13,010 17,010 19,750

2. Loan repayment of $18,500 included a reduction in loan principal of $13,000. The loan was for business purposes only.

3. Repairs and maintenance comprised:
1 November 2012–acquisition and installation of air conditioner 31 January 2013–gravel for car park
1 May 2013–new thermostat for refrigerator unit

  1. Motor Vehicle Expenses comprise operating cost of: Holden–sedan

    Toyota corolla

  2. Telephone Expenses: Telephone Costs–ALLNews Telephone Costs–May Wilson

  3. Asset acquisition comprised:

1stJuly 2012 Freezer
1stJuly 2012 Refrigeration units
1stJuly 2012 Small appliances
1stJuly 2012 Furniture and Fittings
1stJuly 2012 Holden–sedan
1 April 2013–Mobile Phone
1 April 2013–Toyota Corolla including on road costs of $3,000 31 May 2013–new freezer
A trade in of $5000 was allowed for the old unit

2,000 150 140 $2,290

7,860

2,450

$10,310

1,400 300 $1,700

10,000 12,500 1,700 6,300 32,400 700 25,000 4,500

$93,100

2

  1. Julie owns a Holden sedan (2,200cc non rotary engine) used 90% for business purposes. Log books have been maintained to substantiate this usage and the total running costs of maintaining this vehicle is $7,860.

  2. Julie employed May Wilson on 1 April 2013 as a sales assistant/courier. May was provided with

the following benefits as part of her salary package:

  1. Toyota Corolla 2,200 cc non rotary engine. The cost of the car was $25,000 and this included on road costs of $3,000. The total running costs for the period ending 30 June 2013 were $2,450. In the first three months the car travelled 7,000 kilometres.

  2. Entertainment Allowance of $1,000

  3. Telephone expenses of $300 of which $200 are business related calls.

  4. Mobile phone cost of $700

  5. Annual subscription to Vogue Magazine $700

  1. On 1 June 2013 Julie was involved in a car accident. She decided to replace the car’s wrecked petrol engine with a more efficient diesel engine with a much greater economy of operation at a cost of $5,000. She liked the idea as the new and better engine will reduce the likelihood of future repair bills.

  2. On 15 June 2013 Julie was informed that one of his clients who had owed him $2,000 since the beginning of the year was declared bankrupt and will receive no payment.

REQUIRED

  1. Complete an Income Tax Return for ALLNews for the year ending 30.06.2013 with appropriate schedules.

  2. Calculate any fringe benefits tax liability for ALLNews at 30thJune 2013.

The assignment should be completed in groups of 3 as allocated by your lecturer and the word limit is 1000 words.

Marks will be allocated according to the marking criteria as set out below:

  1. Correct calculations inclusive of clear and concise explanation of calculations.

  2. Comprehensive and accurate discussion of taxation issues citing appropriate legislation, ATO

    Rulings and case law.

  3. Evidence of usage of available legal material and wide reading/research.

  4. Presentation–format, spelling, vocabulary, readability.

  5. Appropriate referencing, including in text referencing and a reference list where appropriate.

  6. Engaging proactively with team members in decision making and facilitating the achievement

    of agreed group outcomes.

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