QUESTION 2.13     (Calculation of income from business)

The following are resident taxpayers who derive income from conducting business.

Each taxpayer operateson an accrual basis for tax purposes, except

Rita who uses the cash basis.

 

• Herbie operates a smash repair business and is registered for GST. During the year, he invoiced his customers $77,000 (GST incl.).

 

• Rip operatesas a clothing wholesaler and is registered for GST. During the year, he received $420,000 from customers (GST excl.). His debtors account balances were as follows:

As at 3O June 2021, the balanceof Rip's debtorstotalled $69,300 (GST excl.).

As at 3O June 2022, the balance of Rip's debtors totalled $66,000 (GST excl.)

 

• Jo trades as a sole practitioner architect. She has three employees, two of whom are also professional architects who deal directly with her clients. During the year, she received $900,000 (GST exclusive) in fees from clients.

As at 30 June 2021, the balance of Jo's debtors totalled $33,000 (GST excl.)

As at 30 June 2022, thebalance of Jo's debtors totalled $37,400 (GST excl.)

 

•  Rita trades as a sole practitioner accountant. She does not have any employees and performs all her professional work herself. During the year, she received $176,5OO (GST exclusive) in fees from clients.

As at 3O June 2021, the balanceof Rita's debtorstotalled $19,800 (GST excl.)

As at 3O June 2O22, the balanceof Rita's debtorstotalled $16,500 (GST excl.)

 

• Sue trades as a courier.During the 2021/22income year, Sue had received $180,000 from clients (GST excl.).

As at 30 June 2021, the balance of Sue's debtors totaled $7,500 (GST excl.)

As at 30 June2022, the balance of Sue's debtors totaled $9,800 (GST excl.)

 

During the year, Sue had written off bad debts of $2,OOO and had allowed discounts for early payment of $1,000.

 

For each taxpayer, calculate their assessable income from conducting business for the 2021/22 income year.