Jeremy Wild, a resident single taxpayer aged 49. Jeremy runs a mixed business and has not...

  

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Jeremy Wild, a resident single taxpayer aged 49. Jeremy runs a mixed business and has not elected to apply any of the small business entity concessions. Jeremy uses an accrual method. Jeremy's records disclosed the following for the 2021/22 tax year. All amounts are GST exclusive. Receipts Cash receipts from customers (sales) Fully franked dividend Received Proceeds from loan for shop repairs Proceeds from sale of Motor vehicle - see note 1 COVID19 Cash Boost payment from the ATO COVID19 Job keeper payment from the ATO Payments Purchases of trading stock PAYG Tax Instalments paid by Jeremy Borrowing Costs (incurred on 1 May 2020 on an 8-year loan) Drawings $ 279,000 2,000 25,000 14,000 15,000 14,300 159,300 6,200 1,800 19,000 Repairs - see note 2 Loan Repayments (interest only) Net Wages to employee PAYG tax withheld from employee's wages Superannuation for employees - see note 3 Annual/Personal leave paid - see note 4 Personal Super contributions Private health insurance Drivers licence renewal Late lodgement fee relating to Business Activity Statement Other Deductible Expenses 29,200 2,000 17,500 4,500 9,800 4,000 6,000 1,800 185 500 29,300 TORRENS TUNIVERSITY AUSTRALIA Note 1 The motor vehicle had an adjustable value of $13,000 as at the date of disposal. The original cost was $54,000 in June 2019. The car was used 80% for business. Note 2 During the year, Jeremy spent the following amounts on repairs: Landscaping at Front of Shop (30 October 2021) Repaint Shop (1 March 2022) Installation of Concrete Ramp (completed on 31 January 2022) Note 3 Additional annual/personal leave accrued (provided, not paid) on 30 June 2022 was $4,500 Note 4 Employees' superannuation of $1,400 was accrued as at 30 June 2022 (not yet paid) LAW6001 Tax law Assessment 2 Individual Assignment $3,200 10,000 16,000 Page 4 of 9 TORRENS UNIVERSITY AUSTRALIA Other Information Stock as at 30/6/21 - at cost Stock as at 30/6/21 - at market selling value Stock as at 30/6/22 - at cost Stock as at 30/6/22-at market selling value Debtors (Acc Rec) at 30/6/21 Debtors (Acc Rec) as at 30/6/22 Creditors (Acc payable) as at 30/6/21 Creditors (Acc payable) as at 30/6/22 Shop Fittings Computer Equipment 80,400 2018/19 4,100 2018/19 21,000 28/2/2022 Adj. Value at 30/6/19 ($) Stock taken by Jeremy-at cost Stock taken by Jeremy - at market selling value In the 2020/21 tax year Jeremy used market selling value as the basis for valuing his trading stock. Assets held by Jeremy as at 30 June 2022 included: Asset Cost ($) Year Acquired 30,200 2,200 n/a Effective Life 10 years 4 years 7 years End of Assessment 2 LAW6001 Tax law Assessment 2 Individual Assignment 8,100 7,000 9,400 12,200 ? Jeremy has an adequate private hospital insurance. Required The following Part A and Part B must be submitted as a single file in MS Word format. Part A) Calculate Jeremy's taxable income for 2021/22 and net tax payable or refundable. Use the template provided below (add more lines if needed). 4,500 3,900 7,800 9,200 3,400 5,100 Depreciation Method Diminishing Value Prime Cost Show all workings of each income & deductions of calculations and any tax offsets available for Jeremy. Part B) Explain inclusion/exclusion of each income and deductions with reference to relevant available cases and section numbers as per ITAA36/ITAA97. Page 5 of 9 TORRENS UNIVERSITY AUSTRALIA Part A Template: Jeremy's taxable income and tax calculations for the year ending 30/6/2020. Assessable income Allowable deductions Taxable income Tax calculations Tax on Taxable income Less non-refundable tax offsets Add Medicare Levy Less refundable tax offsets & tax credits Net tax payable (refundable) LAW6001 Tax law Assessment 2 Individual Assignment $ Page 6 of 9 Jeremy Wild, a resident single taxpayer aged 49. Jeremy runs a mixed business and has not elected to apply any of the small business entity concessions. Jeremy uses an accrual method. Jeremy's records disclosed the following for the 2021/22 tax year. All amounts are GST exclusive. Receipts Cash receipts from customers (sales) Fully franked dividend Received Proceeds from loan for shop repairs Proceeds from sale of Motor vehicle - see note 1 COVID19 Cash Boost payment from the ATO COVID19 Job keeper payment from the ATO Payments Purchases of trading stock PAYG Tax Instalments paid by Jeremy Borrowing Costs (incurred on 1 May 2020 on an 8-year loan) Drawings $ 279,000 2,000 25,000 14,000 15,000 14,300 159,300 6,200 1,800 19,000 Repairs - see note 2 Loan Repayments (interest only) Net Wages to employee PAYG tax withheld from employee's wages Superannuation for employees - see note 3 Annual/Personal leave paid - see note 4 Personal Super contributions Private health insurance Drivers licence renewal Late lodgement fee relating to Business Activity Statement Other Deductible Expenses 29,200 2,000 17,500 4,500 9,800 4,000 6,000 1,800 185 500 29,300 TORRENS TUNIVERSITY AUSTRALIA Note 1 The motor vehicle had an adjustable value of $13,000 as at the date of disposal. The original cost was $54,000 in June 2019. The car was used 80% for business. Note 2 During the year, Jeremy spent the following amounts on repairs: Landscaping at Front of Shop (30 October 2021) Repaint Shop (1 March 2022) Installation of Concrete Ramp (completed on 31 January 2022) Note 3 Additional annual/personal leave accrued (provided, not paid) on 30 June 2022 was $4,500 Note 4 Employees' superannuation of $1,400 was accrued as at 30 June 2022 (not yet paid) LAW6001 Tax law Assessment 2 Individual Assignment $3,200 10,000 16,000 Page 4 of 9 TORRENS UNIVERSITY AUSTRALIA Other Information Stock as at 30/6/21 - at cost Stock as at 30/6/21 - at market selling value Stock as at 30/6/22 - at cost Stock as at 30/6/22-at market selling value Debtors (Acc Rec) at 30/6/21 Debtors (Acc Rec) as at 30/6/22 Creditors (Acc payable) as at 30/6/21 Creditors (Acc payable) as at 30/6/22 Shop Fittings Computer Equipment 80,400 2018/19 4,100 2018/19 21,000 28/2/2022 Adj. Value at 30/6/19 ($) Stock taken by Jeremy-at cost Stock taken by Jeremy - at market selling value In the 2020/21 tax year Jeremy used market selling value as the basis for valuing his trading stock. Assets held by Jeremy as at 30 June 2022 included: Asset Cost ($) Year Acquired 30,200 2,200 n/a Effective Life 10 years 4 years 7 years End of Assessment 2 LAW6001 Tax law Assessment 2 Individual Assignment 8,100 7,000 9,400 12,200 ? Jeremy has an adequate private hospital insurance. Required The following Part A and Part B must be submitted as a single file in MS Word format. Part A) Calculate Jeremy's taxable income for 2021/22 and net tax payable or refundable. Use the template provided below (add more lines if needed). 4,500 3,900 7,800 9,200 3,400 5,100 Depreciation Method Diminishing Value Prime Cost Show all workings of each income & deductions of calculations and any tax offsets available for Jeremy. Part B) Explain inclusion/exclusion of each income and deductions with reference to relevant available cases and section numbers as per ITAA36/ITAA97. Page 5 of 9 TORRENS UNIVERSITY AUSTRALIA Part A Template: Jeremy's taxable income and tax calculations for the year ending 30/6/2020. Assessable income Allowable deductions Taxable income Tax calculations Tax on Taxable income Less non-refundable tax offsets Add Medicare Levy Less refundable tax offsets & tax credits Net tax payable (refundable) LAW6001 Tax law Assessment 2 Individual Assignment $ Page 6 of 9

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To calculate Jeremy Wilds taxable income for the 202122 tax year we need to consider the receipts pa... View the full answer