CLWM4100 Case Study Information (Assessment 2)

Assessment Instructions

This case study must be completed and submitted during class time. This case study

must be prepared as a group effort that requires collaboration and effective teamwork. All

students must take part and research the relevant legislation, including cases, and available via

the Australian Taxation Office website.

Read the following case study carefully and answer all required questions in the Answer Booklet

provided in LMS in Assessment 2 folder. Only one person from the group needs to submit the

answer booklet. Make sure you include all group members' names and student IDs on the cover

page.

Case Study

Apply the fundamentals of tax law, including the concepts of source of income, assessable income,

and deductions to determine taxable income.

Your client Andrew Chang has attended your office to have his 2022-year end tax return prepared.

Andrew is 38 years old, single resident taxpayer employed as an IT specialist by Great IT Pty Ltd

(ABN 11 222 333 444).

The expenditure and receipts for Andrew Chang for 2021/22 comprise the following:

Receipts

Net salary received from employer $57,000

Gift money from his fellow workers on birthday $120

Allowances from employer - travel $500

Fully franked dividend received from Qantas $1,200 (company tax rate 30%)

80% franked dividend received from Elderton Homes Pty Ltd $800 (company tax rate 25%)

Unfranked dividend received from Lake Resources $1,100 (company tax rate 30%)

Interest from CBA bank in Sydney $400

Interest received from Hongkong bank in Hong Kong (AUD $900 tax withheld in Hong Kong)

$1,500

Fringe benefit received from employer $17,890

Payments (all substantiated)

Suits (Andrew must wear a business suit as per the company policy when he visits clients)

$1,200

Work related telephone & stationery $370

Cost of meals when required to work overtime $120

Computer purchased on 31 March 2022 and Andrew estimated 20% is used for work purposes

$2,800

Donation made to Arthritis foundation (ABN 67 002 598 594) $200

Donations made to Hillsong church in Sydney $350

Income protection insurance $680

Travel costs between one to another work places for installing software program $520

Other Information

1) PAYG Tax withholding deducted from gross salary $10,540

2) Andrew does not have a private health insurance.

Required

1) Calculate Andrew's taxable income including income and deductions details in the answer sheet

provided.

2) Advise tax payable or refundable for Andrew Chang including Medicare levy and all available tax

offsets (you must show all workings)

1) Advise assessability of receipts and deductibility of payments with explanations (Wages, Gift,

Allowance, Dividends, Interest, Fringe benefits, Suits, Telephone/Stationery, Computer,

Donation, Insurance and Travel costs). Include section numbers in the legislation and/or cases in

your explanation