Calculate sunainas personal tax liability

Assignment Help Taxation

Reference no: EM133877298

Question No 1
After completion of your Master of Professional Accounting, you have joined with an accounting firm called Access Accounting and Tax Servies Pty Ltd Brisbane, QLD. Your client, Sunaina owns a restaurant in Brisbane from 4th July 2023. The business is known as the ‘Homely Restaurant' and Sunaina has an ABN, a registered business name and is also registered for GST. Sunaina has other investment income which she owns herself, and she works as a parttime and earned salary as well. The following figures are as at the end of the financial year, 30 June 2024 and do not include GST. (Do not make any adjustments for GST)

Receipts
6,500 Interest on Bank deposits
223,700 Income from foods' sale
62,500 Rent from her investment property
6,240 Refund from the ATO for the last year's tax return
21,700 Lottery win

Payments
96,000 Rent for her restaurant ‘Homely Restaurant'
3,400 Body Corporate fees on income producing property.
152,000 Employees' salaries
20,600 Superannuation contribution for employees
3,500 Fees paid to a registered Tax Agent
2,000 Travel to and from work to home

Please advise Sunaina on above stated transaction with statutory and common law provisions and calculate correctly. (14 Marks)

Additionally,
Her Taxable Salary earned is $111,000 (Including tax withheld).
She does not have private health insurance.
She is a resident taxpayer.
Sunaina has an outstanding student loan of $46,000 from her studies at Melbourne University.
She has $2100 expenses which she paid for advance chef training.

Sunaina's employer paid a superannuation guarantee charge of 12.5% on top of her salary to her nominated fund.

Required:

Calculate Sunaina's personal tax liability for the year ended 30 June 2024. You should explain your treatment of each item in this question.

Your answer should be in the correct format of Assessable Income less Allowable Deductions along the lines of the income tax formula. This gives you Taxable Income and you multiply this by the different marginal tax rates plus Medicare levy, Medicare levy surcharge (if apply) and education loan. This gives you tax payable less any tax offsets. The terms ‘Payments' and ‘Receipts' are not part of the Tax Formula and are not appropriate for taxation accounting. (16 Marks)

Question No 2

Sunaina's Restaurant Business has installed many machines during the current income year. The following transactions took place: her business undertook the following transactions:

On 1 December, she purchased a new dishwasher machine for $15,000. The Commissioner has determined the effective life of dishwashers to be 8 years.
On 27 April, she installed a new kitchen exhaust fan. The cost of the fan was $1,100, with an additional installation cost of $500. The effective life of kitchen exhaust fans is assessed as 5 years.
On 1 February, a new ducted vacuum cleaner was installed in the business premises at a cost of $5,000. The Commissioner has assessed the effective life of residential ducted vacuum cleaners as 10 years.

Assume that no immediate deduction is available for any of the assets.

Required:

Advise Sunaina of the tax consequences arising from the above transactions for the current income year under both the diminishing value method and the prime cost method, as applicable. Show relevant calculations where necessary.

Reference no: EM133877298

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