TaskOverview:

• Yourwrittenresponsetothisassignmentmustbepresentedinabusinessreport format - (It must have an introduction, executive summary, a main body, and a conclusion). Bullet points are not acceptable.

• Responsestothisassessmenttaskmustnotexceed1,500words.

• Youmustciterelevantcases,ATOrulings,andlegislativereferencestosupport your answers.

• Yourresponsemustalsoprovidereasonsthatexplainandsupportyouranswers.

Brianrunsasmallretailbusinessasasoletrader.Aftermanyyearsofhardwork,hedecided to sell his business and other assets in New South Wales and moved to New Zealand and

retiredwhenhewasaged49years.

Asmallretailbusiness

Brianacquiredtheshop on21June1998for$450,000forrunninghisretailbusiness.Hesold the shop on 21 June 2023 for a net consideration of $1,000,000. The agreed value of the assets at the date of transfer were as follows:

Shop $900,000 Tradingstock$60,000

Depreciatingassets $40,000

Brian'sbusiness-BalanceSheetasat21June2023isasfollows:

Assets	Liabilities
Cash	$20,000	BankLoan	$200,000
AccountsReceivable	$10,000	TradeCreditors	$40,000
Tradingstock	$30,000
Netdepreciatingassets	$55,000
Shop- cost	$450,000

Brian'sbusiness -IncomeandExpensesfrom1July2022to21June2023areasfollows:

Income

Sales		$300,000
Expenses
Costof goods sold
Openingtradingstock	$60,000
Add:Purchases	$90,000
Costofgoods availablefor sale	$150,000
Less:closingtradingstock	$30,000
Costof goods sold		$120,000
Bankinterest		$11,000
Wages-Part-timestaff		$30,000

ThefollowinginformationrelatestoBrian'sbusinessfortheyearended30 June 2023:

• Accountsreceivablebalanceof$10,000intheBalanceSheetcannotberecovereddue to the debtor being declared the bankruptcy on 30 June 2023.
• Thetradingstockbalanceof$30,000(cost)intheBalanceSheetdoesnot include

tradingstockcosting$5,000thatisyettobedeliveredandremainsona freighter at

seaasat30June2023.Deliverytotheshopisexpectedon5July2023.However, Bian does hold the bill of lading (FOB shipping point) as at 30 June 2023.

• Bankinterestpaidupto21June2023was$11,000.Brianalsopaid$220additional

interestchargetothebankon5July2023fortheinterestcoveringtheperiodfrom22 June 2023 to 30 June 2023.

• Brianpaidoffthebankloan($200,000)andoutstandingtradecreditors($40,000)as at 30 June 2023.
• Brianwillreceiveafurther$90,000in2026forsigningacontractnottoopenanother business within a 5 km radius for the next 3 years.
• Accountingdepreciationrateissameasthetaxdepreciationrate.

Brianalsosold thefollowing assetson 25June2023:

• ayachtacquired in2016for$20,000and soldfor $11,000

• collectionofstampsacquiredon30June2022for$13,000andsoldfor$18,500

• VasefromElizabethanerapurchasedon3March2001for$12,000andsoldfor

$1,000becauseitturnedout tobeafake.

Brian had given various items of furniture and his books and music to his brother and total valuewas$9,000 asat25June2023.BrianleftAustraliaon30June2023 andatthattimehe ceased to be a resident. When Brian leftAustralia, he still owned the following assets:

• ahouse:BrianpurchasedahouseinSydneyon1January2018for$750,000andlived in the house until he decided to leaveAustralia on 30 June 2023. The market value is

$1,300,000asat30 June2023.

• AsmallparcelofsharesinANA(public-listedcompany).The1000shareswere acquired on 1 June 2019 at $15 persharewith share brokerage fees of $30.The market value is $30 per share as at 30 June 2023.

Brainhasacarry forwardcapitallossof$160,000asat30June2022fromthesaleofshares. REQUIRED:

Pleaseshowallworkingsandrelevantauthoritiesmustbecitedtosupport your answers.

1. AdviseBrianonthetaxconsequences(ifany)arisingfrom above transactions. (18Marks)

2. CalculateBrian'staxliabilityfortheyearending30June2023,takingintoaccountof the low-income tax offset, the Medicare levy and the Medicare levy surcharge where they are relevant.(2marks) explainin detail please