Part B - Question 1
Note- Please show all workings where necessary and you may use additional space below Please write your workings/explanations and answers in Blue cells
(a) Prepare a statement reconciling net profit with taxable income
Net Profit per Financial Report
Net Profit
ADD BACK: Tax Withheld USA 4,000 Provisions for Customer Warranty Claims 30,000 ATO Penalties 4,000 Accounting Depreciation @ accounting rate 60,000 Equals ADJUSTED NET PROFIT
LESS: Warranty Expenses 11,000.0 Depreciation Tax 56,535.0 Total less amount Equals TAXABLE INCOME
Tax Payable (Refundable)
(b) Calculate the net tax payable by the company for the year, clearly showing all your workings
Tax on Taxable Income $ 160965 Less PAYG 50,000.00 Less FITO - 3,300.00 Tax Payable/(Refundable)
Additional Workings (if any)
FITO Tax on 189165@27.5% = 52,020.375
Less: Tax on (189165-(8000+4000)@27.5% = 48720.375 Amount
$ Foreign income + Tax Withheld = 8000+4000. Tax offset available $3300 (52020.375 - 48720.375)
(c) Who would you consult if you required advice and guidance to determine any income tax related issues?
Write your answers
Initial step of Any advice or direction sought would be provided by a Tax Practitioner Board (TPB)-registered Tax Agent.
ATO also offers numerous sources.
1) ATO advisory items - judgements
2) ATO Guidance Items / Tailored Technical Support
A specialised service for assisting registered tax agents in resolving complex issues.
Also consult Precedential ATO views and Professional Accounting Bodies (Recognised by TPB): CAANZ, CPA Australia, NTAA, IPA, Tax institute of Australia, ACCA, Austrlian Financial Advisers (AFA), ICAEW, Law Society of New South Wales, The Tax institute, royal institute of Chartered Surveyors, and South African Institute of Chartered Accountants.
AAT and courts provide additional remedies when necessary. Courts and the AAT adhere to "The Doctrine of Precedence."
Court and AAT decisions from the past serve as a guide for interpreting current and future situations in order to reach a decision. Tax on Taxable Income $
Note- Please show all workings where necessary and you may use additional space below Please write your workings/explanations and answers in Blue cells
(a) Prepare a statement reconciling net profit with taxable income
Net Profit per Financial Report
Net Profit
ADD BACK: Tax Withheld USA 4,000 Provisions for Customer Warranty Claims 30,000 ATO Penalties 4,000 Accounting Depreciation @ accounting rate 60,000 Equals ADJUSTED NET PROFIT
LESS: Warranty Expenses 11,000.0 Depreciation Tax 56,535.0 Total less amount Equals TAXABLE INCOME
Tax Payable (Refundable)
(b) Calculate the net tax payable by the company for the year, clearly showing all your workings
Tax on Taxable Income $ 160965 Less PAYG 50,000.00 Less FITO - 3,300.00 Tax Payable/(Refundable)
Additional Workings (if any)
FITO Tax on 189165@27.5% = 52,020.375
Less: Tax on (189165-(8000+4000)@27.5% = 48720.375 Amount
$ Foreign income + Tax Withheld = 8000+4000. Tax offset available $3300 (52020.375 - 48720.375)
(c) Who would you consult if you required advice and guidance to determine any income tax related issues?
Write your answers
Initial step of Any advice or direction sought would be provided by a Tax Practitioner Board (TPB)-registered Tax Agent.
ATO also offers numerous sources.
1) ATO advisory items - judgements
2) ATO Guidance Items / Tailored Technical Support
A specialised service for assisting registered tax agents in resolving complex issues.
Also consult Precedential ATO views and Professional Accounting Bodies (Recognised by TPB): CAANZ, CPA Australia, NTAA, IPA, Tax institute of Australia, ACCA, Austrlian Financial Advisers (AFA), ICAEW, Law Society of New South Wales, The Tax institute, royal institute of Chartered Surveyors, and South African Institute of Chartered Accountants.
AAT and courts provide additional remedies when necessary. Courts and the AAT adhere to "The Doctrine of Precedence."
Court and AAT decisions from the past serve as a guide for interpreting current and future situations in order to reach a decision. Tax on Taxable Income $
