Jon operates a retail food outlet. His business meets the criteria for a small business entity and
Question:
Jon operates a retail food outlet. His business meets the criteria for a small business entity and has supplied the following data;
Rental payments (including 3 months $60,000 paid in advance as at 30 June 2020) 300,000
Insurance premium payments (including 6 months $24,000 paid in advance as at 30 June 2020) 72,000
Equipment lease payments (including 24 months $240,000 paid in advance at 30 June 2020) 360,000
Required:
Calculate Jon's deductions from the transactions for the 2019/20 tax year on the basis that he elects to apply the small business concession relating to pre-payments.
Provide the balance day adjustment journal entries for Jon, to account for the prepaid equipment lease payments at 30 June (under accrual accounting).
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill