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QUESTION 1 Hot Pink Batts Pty Ltd manufactures pink batts. The company's turnover during the 2016 income year was $1,700,000. The company wishes to...

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QUESTION 1 Hot Pink Batts Pty Ltd manufactures pink batts. The company's turnover during the 2016 income year was $1,200,000. The company wishes to continue to use all available small business
elections to minimise taxable income. Hot Pink Batts Pty Ltd has prepared the following Profit 3L Loss Statement for the 201? financial year: $ $ Gross Sales 2,400,000
Less Cost of Goods Sold
Opening Stock 33,000
Purchases and Manufacturing Costs 1,250,000 1,283,000
Closing Stock - 300,000 983,000
Gross Profit 1,417,000
Add Other Income
Insurance Receipts — Note 1 40,000
Diesel Fuel Rebate (Government Subsidy) 3,500
Dividend from American Company —— Note 2 3,000
Interest Income 2,000 53,500 1,470,500 Expenses
Gross Wages 680,000
Superannuation 62,000
Provisions for Customer Warranty Claims ~— Note 3 30,000
Truck Expenses 31,000
Accounting Depreciation h Note 4 60,000
Share of Loss from Partnership with Al Insulation Pty Ltd 13,000
Tax Related Expenditure w Note 5 24,000
Other Deductible Expenses 400,000 1,300,000 NET PROFIT BEFORE INCOME TAX 170,500

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