HI5028 TAXATION T2, 2014 ASSIGNMENT 2 SOLUTIONs
T2, 2014 ASSIGNMENT 2 SOLUTIONS
Attributable determination: Friday Week 10
This ordinance is to be submitted by the attributable determination in twain softdelineation (Safeassign â€“ Bb) and distressing delineation.
The ordinance is to be submitted in accordance with tribute plan systematic in the Subject Quenchedline and Novice
It is the employment of the novice submitting the is-sue to secure that the is-sue is in deed his/her acknowledge is-sue. Secure that when incorporating the is-sues of others into your resignation that it truly unquestioned.
Maximum marks: 20 (20%)
Ordinance 1: You should essay twain compressiveness to this ordinance Referablee: you should fexplanation total sections of the multitudinous Acts/regulations where misapply.
Part 1: Case study
Periwinkle Pty Ltd (Periwinkle) is a bathtub maker which sells bathtubs straightway to the referableorious. On 1 May 2013, Periwinkle granted individual of its employees, Emma, with a car as Emma does a cetune of nomadic ce is-sue purposes. However, Emma’s usage of the car is referable unpopular to is-sue barely. Periwinkle alienationd the car on that determination ce $33,000 (including GST).
Ce the duration 1 May 2013 to 31 March 2014, Emma travelled 10,000 kilometres in the car and incurred expenses of $550 (including GST) on inferior repairs that keep been reimbursed by Periwinkle. The car was referable explanationd ce 10 days when Emma was interstate and the car was parked at the airport and ce another five days when the car was scheduled ce annual repairs.
On 1 September 2013, Periwinkle granted Emma with a advance of $500,000 at an profit blame of 4.45%. Emma explanationd $450,000 of the advance to alienation a misemployment residence and lent the retaining $50,000 to her mate (profit detached) to alienation shares in Telstra. Profit on a advance to alienation peculiar possessions is referable deductible period profit on a advance to alienation completeowance-producing possessions is deductible.
During the year, Emma alienationd a bathtub artful by Periwinkle ce $1300. The bathtub barely consume Periwinkle $700 to make and is sold to the notorious referableorious ce $2,600.
(a) Advise Periwinkle of its FBT consequences arising quenched of the aloft advice, including balance of any FBT obligation, ce the year effect 31 March 2014. You may feign that Periwinkle would be entitled to input tribute credits in association to any GSTinclusive acquisitions.
(b) How would your response to (a) contend if Emma explanationd the $50,000 to alienation the shares herself, instead of leffect it to her mate?
( 12 Marks) Part 2: Question
An gather of the asset register of Alpha Pty Ltd (â€˜Alphaâ€™) ce the 2012-13 completeowance year is as follows:
Asset Consume Opening
Treasure Method Effective
Life Decline in Treasure ce
This Duration Noncommunication
Computer 1,350 1,350 Diminishing
Treasure 3 years 450 900
Furniture 5,000 3,000 Prime Consume 10 years 500 2,500
Cabinets 1,200 1,080 Prime Consume 10 years 120 960
Total depreciable possessions are ce 100% employment explanation and Alpha explanations a low-treasure pool ce total prime possessions. The noncommunication treasure of the low-treasure pool at 30 June 2013 was $5,300. Alpha alienationd a printer on 5 June 2014 ce $700.
Advise Alpha of the completeowance tribute consequences arising quenched of the aloft advice ce
the 2013-14 completeowance year. ( 8 Marks)