DellaBella Pty Ltd is a private company which incorporated in Australia in 2009 under the Corporations Act
Question:
DellaBella Pty Ltd is a private company which incorporated in Australia in 2009 under the Corporations Act 2001 in order to operate a Bungee jumping business.
The company has had the following results in the last three years:
Income year Tax result
2015/16 $370 000 loss
2016/17 $500 000 loss
2017/18 $35 000 loss
Della Bella Pty Ltd has prepared the following income statement for 2018/19:
Income | ||
Gross profit from trading | 510,000 | |
Fully franked dividends | 16,800 | |
Exempt income | 11,000 | |
Gross Income | 537,800 | |
Expenses | ||
Interest expense | 23,000 | |
Wages | 58,000 | |
Entertainment expense | 12,000 | |
Fines and penalties | 3,000 | |
Increase in provision for annual leave | 14,700 | |
Depreciation | 41,000 | |
PAYG Instalments paid | 130,000 | |
Total expenses | 281, 700 | |
Net Profit | 256, 100 |
Other information
Note 1 – Decline in value for 2017/18 was $38,900.
Note 2 – Annual leave paid amounted to $12,000.
Note 3 - The $256, 100 profit does not include any tax losses from previous years.
On the 1 September 2016 65% of the shares with voting, income and capital distribution rights changed ownership. On the 17 June 2017 the company started to operate a Berry Bomb ice cream outlet.
DellaBella Pty Ltd has collected GST of $25 909 and received a yearly subsidy since 2009 from the Government of $20 000. The subsidy is classified as exempt income.
Required
With reference to the relevant legislation and/or case law:
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Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett