Park Avenue Pups Pty Ltd (PAP) sells pet food and accessories from the company's Toowoomba store....

 

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Park Avenue Pups Pty Ltd (PAP) sells pet food and accessories from the company's Toowoomba store. PAP is registered for Goods and Services Tax (GST) and reports on the accruals (non-cash) basis each quarter. Below are PAP's transactions for the June 2022 quarter. All amounts include GST where applicable and PAP holds valid tax invoices for all expenses. 1. Sales to Australian customers totalled $110,000 for the quarter. 2. PAP imported trading stock from the United States. The purchase cost was $40,000, and the shipping cost to Australia was $5,000. 3. Purchases from an Australian wholesaler during the quarter totalled $44,000. 4. Salaries and wages paid to employees totalled $30,000. 5. Interest paid on a bank loan totalled $4,000. 6. Electricity and telephone charges totalled $1,320. 7. Rent of a commercial warehouse totalled $6,600. 8. Parking fines for the delivery truck totalled $250. Required: Determine the GST and income tax consequences of each of the above transactions. You must also calculate the GST payable or input tax credit available and the assessable income or allowable deduction for each of the transactions for the June 2022 quarter. References to both the GST and income tax legislation are required. Park Avenue Pups Pty Ltd (PAP) sells pet food and accessories from the company's Toowoomba store. PAP is registered for Goods and Services Tax (GST) and reports on the accruals (non-cash) basis each quarter. Below are PAP's transactions for the June 2022 quarter. All amounts include GST where applicable and PAP holds valid tax invoices for all expenses. 1. Sales to Australian customers totalled $110,000 for the quarter. 2. PAP imported trading stock from the United States. The purchase cost was $40,000, and the shipping cost to Australia was $5,000. 3. Purchases from an Australian wholesaler during the quarter totalled $44,000. 4. Salaries and wages paid to employees totalled $30,000. 5. Interest paid on a bank loan totalled $4,000. 6. Electricity and telephone charges totalled $1,320. 7. Rent of a commercial warehouse totalled $6,600. 8. Parking fines for the delivery truck totalled $250. Required: Determine the GST and income tax consequences of each of the above transactions. You must also calculate the GST payable or input tax credit available and the assessable income or allowable deduction for each of the transactions for the June 2022 quarter. References to both the GST and income tax legislation are required.

Answer rating: 100% (QA)

1 Sales to Australian customers totalled 110000 for the quarter GST PAP is registered for GST and therefore they must charge their customers GST on the sale of goods and services PAP is required to re... View the full answer