Greg Accounting Pty Ltd (a family company) receives contract receipts (approximately $90,000 per year) for accounting...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Greg Accounting Pty Ltd (a family company) receives contract receipts (approximately $90,000 per year) for accounting services provided by Greg (director of the company). The contract is given on the basis of completing monthly BAS and financial reports for the clients. Greg uses the client's equipment to process accounting transactions. Greg also uses a small office in the client's building. Greg performs all of the accounting tasks, while Greg's wife Jill performs secretarial works such as answering phones. Greg Accounting Pty Ltd has three clients. (1) Barry & Wheel Pty Ltd: (2) Barry Pty Ltd; and (3) Wheel Pty Ltd. Barry & Wheel Pty Ltd owns all of the shares in both Wheel Pty Ltd and Barry Pty Ltd. Required Determine whether the income described would be classified as personal services income. Clearly apply ALL possible PSI tests steps to determine the income above. (18 Marks) Greg Accounting Pty Ltd (a family company) receives contract receipts (approximately $90,000 per year) for accounting services provided by Greg (director of the company). The contract is given on the basis of completing monthly BAS and financial reports for the clients. Greg uses the client's equipment to process accounting transactions. Greg also uses a small office in the client's building. Greg performs all of the accounting tasks, while Greg's wife Jill performs secretarial works such as answering phones. Greg Accounting Pty Ltd has three clients. (1) Barry & Wheel Pty Ltd: (2) Barry Pty Ltd; and (3) Wheel Pty Ltd. Barry & Wheel Pty Ltd owns all of the shares in both Wheel Pty Ltd and Barry Pty Ltd. Required Determine whether the income described would be classified as personal services income. Clearly apply ALL possible PSI tests steps to determine the income above. (18 Marks)
Expert Answer:
Answer rating: 100% (QA)
Solution An individual may receive reward as a consideration for a contract for his personal skills efforts or labour which is assessed in his hands though income is earned by an entity like company p... View the full answer
Related Book For
Accounting Business Reporting for Decision Making
ISBN: 9780730302414
4th edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver
Posted Date:
Students also viewed these accounting questions
-
Sandy Smith, managing director of the Calgary Consulting Group, is examining how overhead costs behave with changes in monthly professional labour- hours billed to clients. Assume the following...
-
Describe a variation of the merge-sort algorithm that is given a single array, S, as input, and uses only an additional array, T, as a workspace. No other memory should be used other than a constant...
-
Bailey Nickles, managing director of the Vancouver Consulting Group, is examining how overhead costs behave with changes in monthly professional labour-hours billed to clients. Assume the following...
-
KEA10. LO 16.3 Use the following excerpts from Fruitcake Company's financial records to determine net cash flows from investing activities. Acquired new plant assets Collected interest on investment...
-
A student hourly employee does small secretarial projects. The number of projects she completes in a day is the response variable y. The number of hours she works in a day is the predictor variable...
-
The median price of homes in Austin, Texas is $248,640 (Austin Home Search website, April 2015). A sample of 200 homes sold in the south Austin suburb of Westlake Hills found 111 homes with sales...
-
How do sequence diagrams for design differ from those for analysis? In which one do boundary objects appear? Why?
-
Your firm needs to raise $100 million in funds. You can borrow short term at a spread of 1% over LIBOR. Alternatively, you can issue 10-year, fixed-rate bonds at a spread of 2.50% over 10-year...
-
Consider a 10 year bond with face value $1,000, pays 6% coupon annually and has a yield-to-maturity of 7%. How much would the approximate percentage change in the price of bond if interest rate in...
-
The figure below shows the demand curve for a U.S. farmer for irrigating his land. It costs $100 per acre to irrigate the land. Each acre of land irrigation generates salty runoff that winds up in...
-
You plan to buy a home for $100,000 in the future. You want to guarantee that you will have the money. What would you buy/sell today to accomplish this, and what would it cost today?
-
Economists are saying that currently, Bangladesh's GDP is lower than it is supposed to in the long run, hence prices are falling. Given the above situation, in which state is the economy in? In which...
-
Briefly describe five opportunities for continued growth during the next five years for Zara's parent, Inditex.
-
How we define biases and heuristics? What is their implication in terms of rationality assumption? Are heuristics always result with suboptimal choices? What is the relation between heuristics and...
-
1) What is meant by testing a hypothesis? 2) What is meant by type I and type II errors? 3) What is meant by the level of significance? The level of confidence?
-
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management...
-
Which of these duties might a financial manager in a healthcare organization be responsible for? Prepare a year to date trial balance report for the annual tax filing Submitting invoicing to an...
-
Federated Shipping, a competing overnight delivery service, informs the customer in Problem 65 that they would ship the 5-pound package for $29.95 and the 20-pound package for $59.20. (A) If...
-
Emy Fong has been operating a single-product firm for three years. As this product is now well established in the market, Fong is thinking about adding two new products to her range. Outline the...
-
Analysing the information provided, determine the profit or loss for Daisy Thomas Pty Ltd for the year ended 30 June 2013.
-
a. Calculate the contribution margin per brownie for the brownies sold in the local shops. b. Calculate the contribution margin per brownie for the brownie s requested by the school principal. c. If...
-
Personalized medicine may be used a. to characterize types of tumors. b. to predict the outcome of certain types of cancers. c. to determine the proper dosage of drugs. d. in all of the above.
-
Tumor-suppressor genes promote cancer when a. they are overexpressed. b. they are expressed in the wrong cell type. c. their function is inactivated. d. they are expressed at the wrong stage of...
-
Which of the following is a type of genetic change that could produce an oncogene? a. Missense mutation b. Gene amplification c. Chromosomal translocation d. All of the above can produce an oncogene.
Study smarter with the SolutionInn App