Gemma, a 35-year-old resident taxpayer, operates a delicatessen. During the year ended 30 June 2022, Gemma had
Question:
Gemma, a 35-year-old resident taxpayer, operates a delicatessen. During the year ended 30 June 2022, Gemma had the following transactions (all figures are exclusive of GST):
Cash & Eftpos sales $345,000
Insurance proceeds for stock damaged when a refrigerator caught fire $10,200
Insurance proceeds for the damaged refrigerator $8,400
Bank loan proceeds $40,000
Interest on business cheque account $200
Cash purchases of trading stock $127,000
Rent on business premises $23,200
Wages to staff (net) $15,600 PAYG
Withheld from wages and paid to ATO $4,100
Compulsory superannuation paid on employee wages $1,560
Business loan repayments (interest portion $2,300) $8,500
Personal drawings $12,000
Motor vehicle running costs for Camry (fully substantiated) $8,300
Lease payments on Camry $5,600
Other deductible expenses $42,400
PAYG instalments paid $18,000
Other information Stock on hand at 30 June 2021 $24,600 Stock on hand at 30 June 2022:
Market selling value $25,300
FIFO $19,700
LIFO $17,800
Motor vehicle (Toyota Camry 2400cc) purchased on 1 September 2021 for $38,000. A log-book was kept which showed a 40% business use. Total kilometres travelled for the year were 15,340 km. She did not own a work vehicle prior to this.
Purchase of a new refrigerator to replace the one damaged by fire on 18 November 2021 at a cost of $11,700.
Accounts receivable (Debtors): 30 June 2021 $9,800 30 June 2022 $7,500
Accounts payable (Creditors) (all stock purchases): 30 June 2021 $13,400 30 June 2022 $10,200
Gemma is a member of the Army Reserves and received $3,300 for her part-time service during the 2022 year.
Gemma also had a tax loss of $7,200 brought forward from the previous year.
Gemma uses an accruals basis of accounting for income tax purposes.
Required:
With reference to relevant legal authority, calculate the taxable income of Gemma for the year ended 30 June 2022. You should include workings where relevant and details of why amounts are included or excluded from the calculation. (15 marks)
Assume that Gemma is single with no dependants and private hospital insurance. Calculate her tax payable or refundable for the year ended 30 June 2022. (5 marks)
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett