Jim and Kelly are partners holding equal equity and run a business in partnership by selling computer
Question:
Jim and Kelly are partners holding equal equity and run a business in partnership by selling computer components to the local customers. Jim is an Australian resident and Kelly is a British resident for tax purpose. The partnership made net loss of $15,000 for 2019/2020.
The relevant income and expenses of the Partnership for 2020/21 tax year are as follows:
Revenue (selling computer components) $110,000
Fully franked dividend-ATT $3,800
35% franked dividend-ZOP $800
Interest revenue $400
Less Expenses:
Shop - rental expense $36,000
Promotional sign displayed at local supermarket $2,500
Repairs to computer equipment $360
Part-time staff wages $4,000
Wages – Jim $10,000
Wages - Kelly $8,000
Jim and Kelly share profit and losses equally after the payment of salaries of $10,000 and $8,000 to Jim and Kelly respectively.
REQUIRED
a) Assuming the above figures where applicable, are GST inclusive, for business activities. EXPLAIN AND CALCULATE the GST payable on supplies made and GST input tax credit claimable. Please show all workings citing relevant authorities.
b) Assuming the above figures where applicable, are GST exclusive for business activities. Calculate the share of net partnership income that Jim and Kelly would be required to include in their assessable income in relation to the year ended 30 June 2021. Please show all workings citing relevant authorities.
Expert Answer:
ANSWER a The GST payable before claiming from the ITC is A1000000 while the ITC is A350000 after claiming ITC The net GST PAYABLE IS A650000 b Jim and ... View the full answer
