Jee Jee Jees is a family business chain of 3 Italian restaurants in Melbourne (located city, north and south) owned by 3 shareholder brothers, Joseph, Jacob and James. Joseph advises the accounts for 2020 income year reveal the following and is interested in the Tax Law that applies to those balances, and the tax liability of the company.

Dividends received (50% franked) $147,000

ex general rate company) Net capital gain – discounted 50% 100,000

Sales (Cash basis) 1,950,000

Closing stock 41,500

Opening Stock 20,000

Purchases 500,000

Various general business expenses incurred $721,000

- Advertising 9,000

- Electricity 18,000

- Insurance 20,000

- Interest on loan - premises 120,000

- Rent 150,000

- Staff wages 400,000

- Telephone 4,000

Various Specific expenses incurred

- Depreciation $100,000

- Bad Debts 2,000

- Repairs 27,000

- Tax agent expenses 3,000

- Staff Superannuation 37,000

- FBT 15,000

- ATO Late Payment Penalty 3,000

- Legal costs – ATO Objection 4,000

- Gift to Red Cross 1,000

-Prior year Tax Loss 2,000

Advise what is the taxable income of the company using the above information, correct Joseph as necessary.

Advise the tax liability of the company.

Answer rating: 100% (QA)

To calculate the taxable income of Jee Jee Jees for the 2020 income year we need to take into account the various income and expenses incurred during the year First we need to calculate the gross inco... View the full answer