Calculate the liability, Accounting Basics

XYZ Solutions Pvt Ltd purchased a new vehicle for their employee Sonia to use for both work and private purposes on 1 November 2010.  The car cost $38,500 and they paid an extra $2,200 to have air-conditioning installed at the time. The car was provided to Sonia for her use (both work and private) from that date. Sonia was required to keep a logbook. This showed that 7,500 km were travelled up until 31 March 2011, and of these, 1,500 km were for business purposes.

Unfortunately in mid-December Sonia was involved in a traffic accident, which caused a substantial amount of damage to the work car. The repairs cost $3,300 (which was covered by insurance) and the car was off the road for 7 days while the repairs were being done.

Other expenses incurred by XYZ Solutions Pvt Ltd relating to the vehicle were:

  • Registration & insurance $1,200 (for 12 months), which was paid on 1 November 2010
  • Fuel: $4,000

Note that Sonia contributed $240 for petrol and oil and provided a declaration to XYZ Solutions Pvt Ltd regarding this.

Note that XYZ Solutions Pvt Ltd's is registered for GST and that where relevant the costs mentioned above include GST.

XYZ Solutions Pvt Ltd has elected to use the operating cost basis under section 10 FBTAA.

Required:

(1) Work out whether XYZ Solutions Pvt Ltd has a FBT liability in providing the car to Sonia.  If they do, calculate how much that liability would be for the 2010/11 FBT year.

(2) Work out if Sonia would have a reportable fringe benefit in respect of the car provided to her.

(3) Work out if XYZ Solutions Pvt Ltd has a GST liability on providing Sonia the car.

Posted Date: 2/27/2013 12:33:28 AM | Location : United States







Related Discussions:- Calculate the liability, Assignment Help, Ask Question on Calculate the liability, Get Answer, Expert's Help, Calculate the liability Discussions

Write discussion on Calculate the liability
Your posts are moderated
Related Questions
Brown sole trader Brown has been in business for some years and has kept her drawings slightly below the level of profits each year. You are her accountant, and she has passed


Assignment on Generally Accepted Accounting Principles

norman co borrows $15,000 with a 8%interest 38,000 account receivable paid $26,000 salary

Q. Detailed steps for completing the work sheet ? Accountants use these preliminary steps in preparing the work sheet. The following segments describe the detailed steps for com

uses of accounting as a software enginner

ACCOUNTING STANDARDS An Accounting Standard is a elected set of accounting policies or broad strategies concerning the principles and methods to be elected out of numerous subs

Define Accounting. Briefly explain the accounting concepts which guide the accountant at the recording stage.

#question.outline basic elements to keep in mind while preparing an income statement?

PROFIT AND LOSS ACCOUNT CONCEPTS: The initial point in accepting the profit and loss account is to be clear about the Significance of "profit". Profit is the return for taki