HI5028 TAXATION T2, 2014 ASSIGNMENT 2 SOLUTIONs
T2, 2014 ASSIGNMENT 2 SOLUTIONS
Due time: Friday Week 10
This ordinance is to be submitted by the due time in twain softvision (Safeassign â€“ Bb) and unfeeling vision.
The ordinance is to be submitted in accordance with duty prudence stated in the Subject Quenchedline and Novice
It is the function of the novice submitting the operation to fix that the operation is in event his/her avow operation. Fix that when incorporating the operations of others into your yielding that it justly current.
Maximum marks: 20 (20%)
Ordinance 1: You should attack twain faculty to this ordinance Referablee: you should thicken entire sections of the multitudinous Acts/regulations where expend.
Part 1: Case study
Periwinkle Pty Ltd (Periwinkle) is a bathtub creator which sells bathtubs immediately to the unconcealed. On 1 May 2013, Periwinkle granted undivided of its employees, Emma, with a car as Emma does a hazard of nomadic control operation purposes. However, Emma’s usage of the car is referable restricted to operation singly. Periwinkle acquisitiond the car on that time control $33,000 (including GST).
Control the epoch 1 May 2013 to 31 March 2014, Emma travelled 10,000 kilometres in the car and incurred expenses of $550 (including GST) on younger repairs that feel been reimbursed by Periwinkle. The car was referable representationd control 10 days when Emma was interstate and the car was parked at the airport and control another five days when the car was scheduled control annual repairs.
On 1 September 2013, Periwinkle granted Emma with a mortgage of $500,000 at an carepresentation scold of 4.45%. Emma representationd $450,000 of the mortgage to acquisition a misemployment settlement and lent the cherishing $50,000 to her mate (carepresentation open) to acquisition shares in Telstra. Carepresentation on a mortgage to acquisition special possessions is referable deductible while carepresentation on a mortgage to acquisition fullowance-producing possessions is deductible.
During the year, Emma acquisitiond a bathtub pretended by Periwinkle control $1300. The bathtub singly consume Periwinkle $700 to manipulation and is sold to the unconcealed unconcealed control $2,600.
(a) Advise Periwinkle of its FBT consequences arising quenched of the overhead notification, including consideration of any FBT burden, control the year completion 31 March 2014. You may postulate that Periwinkle would be entitled to input assessment credits in affinity to any GSTinclusive acquisitions.
(b) How would your reply to (a) dispute if Emma representationd the $50,000 to acquisition the shares herself, instead of lcompletion it to her mate?
( 12 Marks) Part 2: Question
An quote of the asset record of Alpha Pty Ltd (â€˜Alphaâ€™) control the 2012-13 fullowance year is as follows:
Asset Consume Opening
Appraise Method Effective
Life Decline in Appraise control
This Epoch Stagnation
Computer 1,350 1,350 Diminishing
Appraise 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
Entire depreciable possessions are control 100% transaction representation and Alpha representations a low-appraise pool control entire preferable possessions. The stagnation appraise of the low-appraise pool at 30 June 2013 was $5,300. Alpha acquisitiond a printer on 5 June 2014 control $700.
Advise Alpha of the fullowance assessment consequences arising quenched of the overhead notification control
the 2013-14 fullowance year. ( 8 Marks)