Task 10 - BAS Case Study - Cash Method

Savoy P/L is registered for GST as a cash payer and has chosen the option to report and calculate GST every quarter.

The following data (GST inclusive where applicable) has been collected by Savoy P/L for the period 1 October 2021 to 31 December 2021:

Account details

$

Sales of goods and services

110,000

Export sales

22,000

Sale of old fax machine

1,540

Interest received

880

Commercial rent received

55,000

Residential rent received

17.600

Business general expenses

66,000

Business stock purchases for resale purposes

19,800

Water rates

1,100

Contractor(s) under voluntary agreement- no ABN was quoted

4,400

Depreciation

8,800

Bank Fees

440

Purchase of a new fax machine

4,400

Wages & salaries (gross)

110,000

PAYG Withholding

30,000

Superannuation

10,450

Commercial rent expenses

6,600

Residential rent expenses

880

You are the graduate accountant at Best Accounting Services Pty Ltd and Savoy P/L provided you with the income and expenses records. You are aware of Division 5 of 'A New Tax System (Goods and Services Tax) Act 1999' which emphasises on accurate GST classifications of income and expenses.

a)For the period 1 October 2021 to 31 December 2021, complete the GST classification worksheet and GST calculation worksheet.

b)SAVOY P/L has provided an extract of their forecasted cash budget:

Extracted forecasted cash flow

December

January

February

March

Estimated Closing bank balance

$20,000

($50,000)

($40,000)

$10,000

You have already prepared the BAS for the December quarter, the payment due amount has been calculated in Part (a). Now you need to complete the following two tasks:

i)Savoy P/L reports and pays GST quarterly. From the above information, what would you bring to the attention of your client regarding the payment of the net GST amount calculated in part a?

Your answer should be between 10 to 20 words.

ii)What action could Savoy P/L take to meet their BAS payment obligations?

Your answer should be between 20 to 30 words.