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(Reconciliation of taxable income) Trash Converters Limited, a small business entity, has prepared an income statement for 2017/18 $ s GROSS PROFIT 1,624,000 Add: OTHER INCOME Unfranked Dividend 2,300 Fully Franked Dividends company tax rate 30%) 7,700 Net Dividends from Spain. note 1 32,000 Gain on Sale of shares - note 2 2,000 44,000 TOTAL OPERATING INCOME 1,668,000 EXPENSES Depreciation - note 3 34,000 Fringe Benefits Tax 48,000 Payroll Tax 46,900 Superannuation - note 4 75,000 PAYG Instalments Paid - note 5 92,000 Other Deductible Expenditure 965.000 1.260.900 NET PROFIT 407,100 Note 1 The dividends from Spain have had $8,000 of tax withheld. Note 2 Shares sold during the year were acquired in 1984 as an investment. Decline in value deduction is calculated as $28,000. Note 3 Note 4 Superannuation includes an amount of $30,000 paid to a director's spouse. This $30,000 amount is deemed to be excessive. All of the PAYG tax instalments relate to the current year. Note 5 Required: a. Complete the table reconciling net profit with taxable income for the 2017/18 tax year. b. Calculate net tax payable by the company for the 2017/18 tax year. (For the purpose of this exercise, assume a 27.5% small business entity company income tax rate, as per chapter 4.3 a. and 4 b. $ $ $ $ $ Net Profit Per Income Statement Add: Franking Credits Foreign Tax -- Spain Accounting Depreciation Superannuation Pave Instalments $ $ $ $ $ un $ $ Less: Decline in Value Accounting Gain on Shares Taxable income $ $ $ $ $ $ Tax on Taxable income Less: Franking Tax Offset $ Payg Instalments $ Foreign Income Tax Offset - Tax Paid S Tax Payable un $ $ (Reconciliation of taxable income) Trash Converters Limited, a small business entity, has prepared an income statement for 2017/18 $ s GROSS PROFIT 1,624,000 Add: OTHER INCOME Unfranked Dividend 2,300 Fully Franked Dividends company tax rate 30%) 7,700 Net Dividends from Spain. note 1 32,000 Gain on Sale of shares - note 2 2,000 44,000 TOTAL OPERATING INCOME 1,668,000 EXPENSES Depreciation - note 3 34,000 Fringe Benefits Tax 48,000 Payroll Tax 46,900 Superannuation - note 4 75,000 PAYG Instalments Paid - note 5 92,000 Other Deductible Expenditure 965.000 1.260.900 NET PROFIT 407,100 Note 1 The dividends from Spain have had $8,000 of tax withheld. Note 2 Shares sold during the year were acquired in 1984 as an investment. Decline in value deduction is calculated as $28,000. Note 3 Note 4 Superannuation includes an amount of $30,000 paid to a director's spouse. This $30,000 amount is deemed to be excessive. All of the PAYG tax instalments relate to the current year. Note 5 Required: a. Complete the table reconciling net profit with taxable income for the 2017/18 tax year. b. Calculate net tax payable by the company for the 2017/18 tax year. (For the purpose of this exercise, assume a 27.5% small business entity company income tax rate, as per chapter 4.3 a. and 4 b. $ $ $ $ $ Net Profit Per Income Statement Add: Franking Credits Foreign Tax -- Spain Accounting Depreciation Superannuation Pave Instalments $ $ $ $ $ un $ $ Less: Decline in Value Accounting Gain on Shares Taxable income $ $ $ $ $ $ Tax on Taxable income Less: Franking Tax Offset $ Payg Instalments $ Foreign Income Tax Offset - Tax Paid S Tax Payable un $ $