8. Claire operates a catering business from a small factory outlet which she leased last year....

  

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8. Claire operates a catering business from a small factory outlet which she leased last year. The lease is for 5 years and the lease preparation costs were $3,900. At 30 June PY she had the following assets, all of which were depreciated using the diminishing value method and none of which had been purchased prior to 10 May 2006: Assets in a low-value pool Commercial stove (cost $10,200, effective life 8 years) Commercial oven (cost $8,900, effective life 10 years) Pasta making plant (cost $2,500, effective life 28 years) Computer (cost $5,500, effective life 5 years) Food heating unit (cost $2,000, effective life 6 years) 12,800 5,400 7,700 2,000 3,000 930 During the current year, she bought the following assets: New printer on 7 May New stove, to replace existing stove. The purchase was made on 15 July and she received a trade-in of $6,000 on her old stove. The effective life was also 8 years. New computer to replace existing computer on 24 December. She sold the old computer to her brother for $1,500 which was what the vendor had offered her as a trade-in on the old computer. Its effective life was 5 990 15,650 6,720 years. New refrigerated van on 1 October. It had an effective life of 10 years. 33,000 During the current year, Claire sold a small portable fridge which was in the low- value pool for $840. She also decided to move the food heating unit into the low- value pool. Claire's income for the year is as follows: Cash received 170,000 This included $20,000 from functions in May and June of the prior year. Outstanding from the current year's functions were $28,500. Interest 2,780 Claire's expenses were as follows: Accounting fees Wages to staff 900 30,000 60,000 2,145 Food Stamp duty on new van Stamp duty on loan to buy new van (3 year loan taken out on 1 October) Lawyer's fees for review of loan contract 120 550 2,860 1,500 Fuel Insurance Calculate Claire's taxable income and net tax payable including Medicare levy for the current year assuming she wishes to minimise her tax payable and is a SBE taxpayer. In earlier years she did not use the UCA option but used the low-value pool and general depreciation. In the current year she wishes to use the UCA option available for SBE taxpayers. 300 Sales-as a trading husiness, use accruale method C0,000 - 20,c00+28,500 ) Interect 2,140 197,240 Assessable 1ncome less Allowohle Deductions ! 900 Accounting fees Food 60, 000 30, c00 wages to staft Stamp duty on new van - capital expense 167 Stamp duty on loan to huy new van 3yrs = 1095 days Lawyer 's fees for review of (oan contract - incurrecl last year would have been deducted lost year Hence $120ot $ 550 $4670 $ 670 $0.61 1,095 from ol Jul to ol Oct 2 273 day s $0-61 A 27 3 days = $$ 167 2,860 fuel Insurance 1,500 5, 14 9 Depreciation - low-value pool Depreciation - SBE pool la rable income 33,740 134,316 46,964 Tac on Taxahle Fncom e 6,810-30 (3,572-00 + 32-5% E3A.000 + U6, 964) ) Plus : medicare leuy 939-28 C2% x $ U6,964) 7,749-58 Less: LMITO (255 t 7-5% C46,964-37.000)) ,002.30 Less : LI TO ( $445-00 - C(46,964-371000) xo.015 ] 295-54 less : Small Business Tax offset 523 01 1.820-85 5,१ २8 .73 S rall Business Tax off tó tep 1- workout the pro portion Netbusiness income Taxableincome Low-va lue Pool - this will continue to be depreciated as a low-valuepool 12,8 00 x 37-5% 4.600 8,000 Assets in a loa -value pool Food heat cost 930 X 37-5% = 349 581 C840) Sale of smallL fridge 5,149 7.741 Closing value of low-value pool SBE Pool Asses which cast less than $ 30,000 New printer 990 New stoue 15,650 New computer 6,720 23, 360 100 % 23.360 Opening pool balance -put inclosing value of non -pooled assets. 5,430 18.100 30% 12.670 CUCA) Opening halance rule (5,400+ 7, 700 + 2000 + 3, 00) Newasset-van refrigerated 15% 4,950 33,000 28,050 40.720 Assets sold 8 Stove (6,000) Computer (I500) (7, 500) C7.500) Closing pool halance Total pool deprectation 33,220 33.740 8. Claire operates a catering business from a small factory outlet which she leased last year. The lease is for 5 years and the lease preparation costs were $3,900. At 30 June PY she had the following assets, all of which were depreciated using the diminishing value method and none of which had been purchased prior to 10 May 2006: Assets in a low-value pool Commercial stove (cost $10,200, effective life 8 years) Commercial oven (cost $8,900, effective life 10 years) Pasta making plant (cost $2,500, effective life 28 years) Computer (cost $5,500, effective life 5 years) Food heating unit (cost $2,000, effective life 6 years) 12,800 5,400 7,700 2,000 3,000 930 During the current year, she bought the following assets: New printer on 7 May New stove, to replace existing stove. The purchase was made on 15 July and she received a trade-in of $6,000 on her old stove. The effective life was also 8 years. New computer to replace existing computer on 24 December. She sold the old computer to her brother for $1,500 which was what the vendor had offered her as a trade-in on the old computer. Its effective life was 5 990 15,650 6,720 years. New refrigerated van on 1 October. It had an effective life of 10 years. 33,000 During the current year, Claire sold a small portable fridge which was in the low- value pool for $840. She also decided to move the food heating unit into the low- value pool. Claire's income for the year is as follows: Cash received 170,000 This included $20,000 from functions in May and June of the prior year. Outstanding from the current year's functions were $28,500. Interest 2,780 Claire's expenses were as follows: Accounting fees Wages to staff 900 30,000 60,000 2,145 Food Stamp duty on new van Stamp duty on loan to buy new van (3 year loan taken out on 1 October) Lawyer's fees for review of loan contract 120 550 2,860 1,500 Fuel Insurance Calculate Claire's taxable income and net tax payable including Medicare levy for the current year assuming she wishes to minimise her tax payable and is a SBE taxpayer. In earlier years she did not use the UCA option but used the low-value pool and general depreciation. In the current year she wishes to use the UCA option available for SBE taxpayers. 300 Sales-as a trading husiness, use accruale method C0,000 - 20,c00+28,500 ) Interect 2,140 197,240 Assessable 1ncome less Allowohle Deductions ! 900 Accounting fees Food 60, 000 30, c00 wages to staft Stamp duty on new van - capital expense 167 Stamp duty on loan to huy new van 3yrs = 1095 days Lawyer 's fees for review of (oan contract - incurrecl last year would have been deducted lost year Hence $120ot $ 550 $4670 $ 670 $0.61 1,095 from ol Jul to ol Oct 2 273 day s $0-61 A 27 3 days = $$ 167 2,860 fuel Insurance 1,500 5, 14 9 Depreciation - low-value pool Depreciation - SBE pool la rable income 33,740 134,316 46,964 Tac on Taxahle Fncom e 6,810-30 (3,572-00 + 32-5% E3A.000 + U6, 964) ) Plus : medicare leuy 939-28 C2% x $ U6,964) 7,749-58 Less: LMITO (255 t 7-5% C46,964-37.000)) ,002.30 Less : LI TO ( $445-00 - C(46,964-371000) xo.015 ] 295-54 less : Small Business Tax offset 523 01 1.820-85 5,१ २8 .73 S rall Business Tax off tó tep 1- workout the pro portion Netbusiness income Taxableincome Low-va lue Pool - this will continue to be depreciated as a low-valuepool 12,8 00 x 37-5% 4.600 8,000 Assets in a loa -value pool Food heat cost 930 X 37-5% = 349 581 C840) Sale of smallL fridge 5,149 7.741 Closing value of low-value pool SBE Pool Asses which cast less than $ 30,000 New printer 990 New stoue 15,650 New computer 6,720 23, 360 100 % 23.360 Opening pool balance -put inclosing value of non -pooled assets. 5,430 18.100 30% 12.670 CUCA) Opening halance rule (5,400+ 7, 700 + 2000 + 3, 00) Newasset-van refrigerated 15% 4,950 33,000 28,050 40.720 Assets sold 8 Stove (6,000) Computer (I500) (7, 500) C7.500) Closing pool halance Total pool deprectation 33,220 33.740

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Statement showing tax liability of Ms Claire Particulars Amount Amount Sales Income Accrual basis ad... View the full answer