Sophia operates a large singing school with 22 employees. She receives advance fee payments from students in respect of each course (a course consists of 26 lessons). If a student does not attend all of the lessons, Sophia has a policy of refunding the unused portion of their fee. For accounting purposes Sophia does not recognise fees received in advance as income until the actual lesson is provided. Sophia has provided you with the following information for the current tax year ended 30 June: Singing fees received during the year: $60 000 (Lessons not yet taught of this figure amount to $15 000). Interest of $500 on a term deposit of $20 000 that matured on 30 April of the current tax year. Sophia did not directly receive the interest. She requested that the bank re-invest the principal and interest (a total of $20 500) for another 12 months.

Applying relevant case law to the above information, What is Sophia's assessable income for the year ended 30 June?

Answer rating: 100% (QA)

Sophias Assessable Income for Tax Year Ended June 30th Singing Fees Sophia applies the accrual accou... View the full answer