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.


(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. Example of perpetual inventory procedure? The Perpetual inventory procedure Companies use perpetual inventory procedure in a range of business settings. In the past companie

Other than the Parsimonious forecasting approach, what other financial forecasting approaches are there? Other than the Parsimonious forecasting approach, there are a number of oth

Revenues from the theatrical supply of motion pictures are recognized when motion pictures are exhibited. Television licensing revenues are recorded while the program material is a

Hi I need a quote for an assingment. How do I submit it to you?

Purpose To assess your ability to:  •apply REA ontology concepts to an organization  •prepare diagrams for the identification of the flow of data through an organization

Q. Example on closing process? This problem engross using a work sheet for Green Hills Riding Stable Incorporated for the month ended 2010 July 31 and performing the closing pr

what is meaning by parallel accounts

Assignment Comments –    Debt-to-assets ratio: 50% Current Ratio: 1.8x Total assets turnover: 1.5x       Days sales outstanding: 36.5 days* Gross profit margin