Saru is in the business of importing soccer balls from japan and selling them in Australia. on
Question:
Saru is in the business of importing soccer balls from japan and selling them in Australia. on 25 March, Saru purchases $35000 worth of soccer balls from Japan. Saru did not have ownership of the soccer balls until they were unloaded from an air craft in Australia on 15 th April in April, Saru took 50 soccer balls from his stock to give to a creditor in satisfaction of a debt of 2000 that Saru owed the creditor.
in total the soccer ball had cost Saru $1000 and he usually would have sold them for $2500. after a few weeks of steady sales, Saru decided to hold a winter sale in May. the sale was a huge success and he completely sold out his stock within a few days. Saru sold the stock for$ 28000. the stock had cost him 14000 in total and he would normally have sold it for $35000 following the sale Saru bought 100 soccer balls which were of the new design, those soccer balls cost 30 each and Saru expects to sell them for $75 each because he is so excited about a new design, he keeps one scor balls for himself. advice Saru as to the following
a) is the purchase of the soccer balls deductible? if so, when would he be able to deduct the purchase
b) what are the tax complication of Saru taking 50 soccer balls from his stock to give to a creditor in satisfaction the debt of 2000
c) is the proceeds of the sale assessable under s6-5 or s70-90
d) what are the tax implications of Saru keeping a soccer ball for himself?
Quantitative Methods for Business
ISBN: 978-0324651751
11th Edition
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey cam