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Your client, AXX runs small clothes shop in the suburb of BXX. He operates as a sole trader. The business is known as 'AXX's fashions' and AXX has an...

Your client, AXX runs small clothes shop in the suburb of BXX. He operates as a sole trader. The business is known as 'AXX's fashions' and AXX has an ABN and is also registered for GST. The following figures are exclusive of GST.


Receipts

     $

298,000 Sales of clothes

 17,000     Rental income from an income producing investment apartment

   1,000   Interest on Bank deposits.

 8,000       Fully franked dividend from a large Australian public company

   2,000   Exempt income from part-time military service   

   2,000   Private Health fund refunds

   6,000      Fifty-percent franked dividend received from a large Australian public company


Payments

      $

 15,000     Body Corporate fees on income producing property

 25,000     Part-time employee salary

2,000          Superannuation contribution for employee

   5,000      Interest on money borrowed to purchase the income producing investment apartment

3,000         Insurance and land tax for the investment property

   1,100   Fees paid to a registered Tax Agent

 30,000     New item of plant with an estimated life of 10 years 

   1,000   Travel to and from work

   2,000   Rates on his principal residence

   5,000   Doctors fees for AXX

   3,000   Doctors fees for AXX's wife

   6,000   Superannuation contribution for AXX


 (a) AXX is using the Small Business Entity (SBE) concessions

 

(b) Stock at beginning of the year was valued at                  $35,000


      Stock at end was:             Cost                     $16,000

                                  Market selling value  $19,000

                                  Replacement       $18,000

      

(c) On 1 July 2018 the opening depreciation pool balance for the SBE pool was $40,000. During the year AXX purchased 1 new depreciating assets used 100% for business purposes. This is recorded in the payment's information listed above. The investment apartment was purchased new on 1 July 2018 and is part of a hotel complex. The real estate agent advised Bill Jones that the construction cost of the apartment was $287,000 and this was confirmed by the builder.

(d) AXX has a carry forward tax loss from an earlier income year of $10,000.

(e)      AXX and his family are members of a private health fund and do                                                                                                                       have private hospital insurance.


 

REQUIRED

Calculate AXX's personal tax liability for the year ended 30 June 2019. You should explain your treatment of each item in this question. Figures can be rounded to the nearest dollar.

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