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
Q. Show the examples of long-term assets? Property, plant, and equipment are assets with helpful lives of more than one year a company acquires them for use in the business r

what is the exact meaning of journal that we doing entries??

Q. Sales returns affect both revenues and cost of good? When a company sells merchandise to customers then it transfers the cost of the merchandise from an asset account that i

Wendell Corporation exchanged an old truck and $25,500 cash for a new truck. The old truck had a book value of $6,000 (original cost of $25,000 less $19,000 in accumulated depre

Question: Part A: Briefly explain the term "depreciation" and give three reasons why do we need to provide for depreciation on fixed assets during a financial year. Part

Secret Trails received payment in full within the credit period for horse boarding for $900 plus 6% sales tax. terms of the sale were 2/10, n/30. which entry is required to record

Determine the term - Working capital and current ratio Determining these ratios would help a business determine if will have enough capital to operate and can meet their debts.

Q. Financial statements of business organizations? Business entities may perhaps have many objectives and goals. For instance one of your objectives in owning a physical fitnes

Q. Describe Retail inventory method? Retail stores often use the retail inventory method to estimate ending inventory at times other than year-end. Taking a physical inventory

the Dwyer corporation incurred costs of 114000 in purchasing a process which it eventually had patented. The patent was issued on July 20x1. To secure the patent, an additional 6