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
1-Aug-13 Started business by investing $20,000 from personal savings into a business' bank account and a car and furniture worth $90,000 and $30,000 respectively. 2-Aug-13 Purc

how do you find simple interest

Verify the amount to be paid within the discount period for purchase with an invoice price of $7,745, subject to credit terms of 2/10, n/30.

Please help journalize: -On January 1, 2017 Harmony issued 1,500 shares of $22 par, 8% preferred stock for $43,700. -On January 1, 2017 Harmony also issued 2,000 shares of common s

Billable expenses are those expenses incurred by you on behalf of your client in performing duties / supply and service. These expenses are recoverable from your customer by way of

The following was taken from the records of the Frederic Products Company for 200X: 5) y for 200X: Total estimated manufacturing overhead cost for the year is $288,750 Total

What is a limitation of the use of accounting information that is totally outside the entity's control? A  changes in legal reporting requirements B  changes in inventory valua

Suppose you want to have $5,000 saved at the end of five years. The bank will pay 2% interest on your money. How much would you have to deposit today to have the $5,000 you want


Q. Describe about adjunct account? The Transportation-In account files the inward freight costs of acquiring merchandise. Transportation-In is an adjunct account in that it is