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Question - Walt Zing operates a large dancing school with 20 employees, and receives advance fee payments from students in respect of each term (a term consists of 20 lessons). If a student fails to attend all of the lessons, Walt refunds the students the unused proportion of their tuition fee. For accounting purposes Walt does not recognise fees received in advance as income until the actual lesson is provided. For the current income tax year, Walt has the following records: Advance fees received during the year: $26,500 (Lessons still to be taught in relation to advance fees is $10,500).
Interest of $100 on term deposit of $10,000 that matured on 30 May of the current income tax year. Walt did not directly receive the interest, but instead instructed the bank to re-invest the principal and interest (a total of $10,100) for another 12 months.
Required - Assuming Walt receives no other amounts, compute his assessable income for the current income year?
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