Task $1$: Companies

Scenario $1$ Your client for MT Accounting this week is Kasem Fruit and Vegetable Supply Ltd$.$ You obtain the following information. The business activity conducted through the company is horticulture, and the activity hasn't changed since its incorporation in $2018.$ Suzi and Jono Kasem are the two shareholders. Jono works full$-$time, and Suzi works part$-$time for the company. There are currently no plans for the company or its business to wind up$.$ Kasem Fruit and Vegetable Supplies Ltd has a $30$ June balance date. Kasem Fruit and Vegetable Supply Ltd is an ordinary company. Suzi and Jono each own $1,500$ of the $3,000$ shares in the company. Suzi and Jono purchased the shares in the company on $1$ July $2023$ from Jono's parents. The company had a nil opening balance in its imputation credit account. The company has a loss carried forward from $2023$ of $$78,475.$ The company paid $$54,880$ provisional tax for $2024($$$15,600$ on $27$ October $2023,$ $$19,640$ on $28$ March $2024$ and $$19,640$ on $26$ July $2024).$ Net business income received for the year ended $30$ June $2024,$ after allowing for all deductions other than shareholder$-$employee salaries, was $$462,500.$ Suzi and Jono were both paid shareholder$-$employee salaries. No PAYE was deducted. Jono's salary was $$145,000,$ and Suzi's was $$73,000.$ On $20$ March $2024,$ the company declared and paid a $$64,800$ cash dividend. Use the $28$:$72$ imputation ratio. RWT was deducted. The company received $$5,075$ gross interest income from Westpac, from which $$1,421$ RWT was deducted. The interest was received when a term deposit matured on $8$ March $2024.$ Jono's only income is from Kasem Fruit and Vegetable Supply Ltd$.$ He has paid no $2024$ provisional tax. Jono's balance date is also $30$ June.

Question $1$

a$.$

Explain the treatment of the $$78,475$ loss carried forward from $2023.$

b$.$

Calculate Kasem Fruit and Vegetable Supply Ltd$\text{'}$s $2024$ taxable income. Show your calculations.

c$.$

Calculate Kasem Fruit and Vegetable Supply Ltd$\text{'}$s $2024$ terminal tax or refund due. Then, calculate the $2025$ provisional tax with the amount and due date of each instalment, assuming the income tax return was filed on $26$ September $2024.$

d$.$

Prepare the $2024$ ICA for Kasem Fruit and Vegetable Supply Ltd$.$

Set A ver. $2\mathrm{.}0$

$$ The Open Polytechnic of New Zealand $3$

e$.$

Calculate Jono's $2024$ taxable income and $2024$ terminal tax or refund due.

$(20$ marks$)$