{"id":436729,"date":"2018-07-24T19:27:47","date_gmt":"2018-07-24T19:27:47","guid":{"rendered":"https:\/\/essaypaper.org\/law511-australian-taxation-law\/"},"modified":"2018-10-24T08:50:02","modified_gmt":"2018-10-24T08:50:02","slug":"law511-australian-taxation-law","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/law511-australian-taxation-law\/","title":{"rendered":"LAW511 \u2013 Australian Taxation Law"},"content":{"rendered":"<div> <strong>LAW511 \u2013 Australian Taxation Law<\/strong><\/p>\n<p><strong>Assignment 2<\/strong><\/p>\n<p>\u00a0<\/p>\n<p><strong>QUESTION <\/strong><\/p>\n<p>Barry Lee and Brett Wong are adult Australian residents.\u00a0\u00a0 On 1 July 2003 they formed a partnership called \u2018The Two B\u2019s\u2019 to run a sports supply business. The partnership supplies football clothing and equipment to football clubs in Australia. The business is registered for GST.<\/p>\n<p>The partnership accounts for the business for the year ending 30 June 2017 disclose the following financial details:<\/p>\n<p><strong>The following receipts and expenses are exclusive of GST unless otherwise stated.<\/strong><\/p>\n<p>\u00a0<\/p>\n<p><strong>RECEIPTS<\/strong><\/p>\n<p>Gross trading receipts\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a03,900,000<\/p>\n<p>Capital gain from sale of shares held in an Australian internet company \u00a0\u00a0\u00a0\u00a0 20,000<\/p>\n<p>Cash dividend from BHP\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 10,500<\/p>\n<p>\u00a0\u00a0 See note (iii) below<\/p>\n<p>Interest income from Bank of China\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 11,250<\/p>\n<p>\u00a0\u00a0 See note (iv) below<\/p>\n<p>Insurance proceeds received for writing off the car\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 80,000<\/p>\n<p>\u00a0<\/p>\n<p><strong>EXPENSES<\/strong><\/p>\n<p>\u00a0<\/p>\n<p>Salary to Barry\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 40,000<\/p>\n<p>Interest on loan of funds by Brett\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 10,000<\/p>\n<p>Salaries paid to employees\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0950,000<\/p>\n<p>Rent and power\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 60,000<\/p>\n<p>Purchase of trading stock (see note (v) below)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 620,000<\/p>\n<p>Superannuation to staff\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 85,500<\/p>\n<p>Superannuation paid on behalf of Barry\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a025,000<\/p>\n<p>Superannuation paid on behalf of Brett\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 25,000<\/p>\n<p>Purchase of BMW motor vehicle for Brett (see note (vi) below)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 120,000<\/p>\n<p>Purchase of treadmill and exercise bikes (see note (vii) below)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0180,000<\/p>\n<p>Interest on bank overdraft\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 18,623<\/p>\n<p>Provision for long service leave (see note (viii) below)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a025,984<\/p>\n<p>Provision for bad debts (see note (ix) below)\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 122,000<\/p>\n<p><strong>Notes &#8211; additional information in respect of the partnership.<\/strong><\/p>\n<p>\u00a0<\/p>\n<ul>\n<li>The partnership agreement stipulates that Barry and Brett share profits and losses in respect of both income and capital gains and losses on the basis of 50% to Barry\u00a0 and 50% to Brett.<\/li>\n<li>The partners purchased the Australian internet company shares in January 2004 and sold them on 31 May 2017.<\/li>\n<li>The dividend was fully franked.<\/li>\n<li>The Bank of China withheld AUD $1,250 from the gross interest<\/li>\n<li>Trading stock at the beginning of the financial year was $370,000. The trading stock at the end of the year was valued as:<\/li>\n<\/ul>\n<p>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Market value \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 $860,000<\/p>\n<p>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Cost\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$790,000<\/p>\n<p>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Replacement value\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0$846,000<\/p>\n<ul>\n<li>The car was purchased for use by Brett as he was responsible for sales. The car was purchased on1 January 2015. It was only used 100% for work purposes. On 31 May 2017 the car was involved in an accident and written off. The partnership received $80,000 from the insurance company on 15 June 2017. The purchase price only is exclusive of GST.<\/li>\n<li>Various items of equipment were purchased on 1 July 2016 for $65,000 and 1 January 2017 for $115,000. The effective life for the equipment is 4 years. The figures are exclusive of GST. The items are used 100% for business purposes.<\/li>\n<li>During the year the partnership paid out long service leave to staff of $13,507.<\/li>\n<li>During the year the partnership wrote off as bad debts $36,849.<\/li>\n<\/ul>\n<p><strong>Required:<\/strong><\/p>\n<ol>\n<li>Calculate the net partnership income for the partnership for the year ended 30 June 2017.<\/li>\n<li>Calculate the tax payable for Barry for the year ended 30 June 2017.<\/li>\n<\/ol>\n<p><strong>Additional information for Barry:<\/strong><\/p>\n<p><strong>Income<\/strong><\/p>\n<p>\u00a0<\/p>\n<p>7,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Dividends received from an Australian resident company fully franked<\/p>\n<p>30,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Gross salary received from part-time lecturing at the University<\/p>\n<p>($9,000 in PAYG W)<\/p>\n<p>\u00a02,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Refunds from Government Medicare System for medical expenses\u00a0<\/p>\n<p>\u00a05,000\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Interest on Bank Deposits<\/p>\n<p>\u00a010,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Rental income from an investment property <strong>\u00a0<\/strong><\/p>\n<p>\u00a0<\/p>\n<div class=\"onp-locker-call\" data-lock-id=\"onpLock844952\">\n<p> <strong>\u00a0<\/strong><strong>Payments<\/strong><\/p>\n<p><strong>\u00a0<\/strong>1,200\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Train fares for travel to and from work<\/p>\n<p>\u00a02,200\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Rates on family home<\/p>\n<p>\u00a0 \u00a0 900\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Electricity for family home<\/p>\n<p>\u00a03,000\u00a0\u00a0 \u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Tax agent\u2019s fees for preparing tax return for Barry<\/p>\n<p>\u00a05,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Gross medical expenses for Barry and his wife.\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n<p>\u00a02,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Rates paid on abovementioned investment property <strong>\u00a0<\/strong><\/p>\n<p>\u00a015,000 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Interest paid on loan to acquire the investment property <strong>\u00a0<\/strong><\/p>\n<p>5,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Cost of painting the investment property immediately after purchasing the property <strong>\u00a0\u00a0<\/strong><\/p>\n<p>1,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Cost of replacing roof tiles on the investment property after the roof was damaged in a severe storm in February 2017 <strong>\u00a0<\/strong><\/p>\n<p>15,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Cost of extending the bathroom in the investment property <strong>\u00a0<\/strong><\/p>\n<p>\u00a05,000 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Maintaining Barry\u2019s father Myron, who is a permanent resident of Australia and who earned $1,282 adjusted taxable income during the 2016-2017 income year.\u00a0<\/p>\n<p>Barry and his wife have Private Hospital Insurance with HCF<\/p>\n<p>\u00a0<strong>(30 marks) <\/strong><\/p>\n<\/div>\n<p> \u00a0<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>LAW511 \u2013 Australian Taxation Law Assignment 2 \u00a0 QUESTION Barry Lee and Brett Wong are adult Australian residents.\u00a0\u00a0 On 1 July 2003 they formed a partnership called \u2018The Two B\u2019s\u2019 to run a sports supply business. The partnership supplies football <a href=\"https:\/\/www.benedictsol.com\/blogs\/law511-australian-taxation-law\/\" class=\"read-more\">Read More &#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[197,31,15],"tags":[],"class_list":["post-436729","post","type-post","status-publish","format-standard","hentry","category-accounting-assignment-help","category-assignment-help","category-essay-paper-writing"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/436729","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=436729"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/436729\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=436729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=436729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=436729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}