Reference no: EM132157937

Carry out BAS and IAS tasks Assignment -

Assessment Task 1 -

QUESTION 1 - MULTIPLE CHOICE QUESTIONS

1. An ABN is:

a) Similar to a TFN

b) Required for the GST

c) An number which is a unique identifier for a particular business and appears on the Australian Business Register

d) Required by employees

2. An employee's TFN is reported to the ATO by submitting a:

a) TFN report

b) TFN application

c) Payee declaration

d) TFN Declaration

3. The PAYG instalment system is:

a) The system whereby a business pays its own tax in advance

b) The system whereby a business pays tax to the ato in respect of tax withheld from others

c) Exactly the same as the payg withholding system and affects the same type of income

d) All of the above

4. A document which summarises a payee's gross earnings and PAYG tax withheld for an income tax year:

a) Tax file number declaration

b) Withholding declaration

c) Tax reconciliation

d) PAYG Payment summary

5. Which of the following is not included in PAYG instalment Income?

a) A capital gain

b) Sales revenue

c) Rental income

d) Interest income

6. Which of the following tax obligations is not reported on the Instalment Activity Statement?

a) FBT instalments

b) Personal Income Tax

c) PAYG Installments

d) PAYG Amounts withheld from others

7. Apply the correct tax codes to the following supplies:

a) Takeaway food

b) Soft drinks

c) Confectionery

d) Fresh fruit

8. GST avoids double taxation by allowing businesses to:

a) Receive input tax credits

b) Pay only the output tax

c) Pay only the input tax

d) Receive output tax credits

9. Businesses that export all goods and services will only:

a) Receive output tax credits

b) Pay the output tax

c) Pay the input tax

d) Receive input tax credits

10. A tax invoice will not be required if:

a) The sale is under $75

b) An input tax credit is to be claimed

c) The sale is over $1,000

d) A customer requests one

11. The threshold for trading enterprises to register for GST is:

a) $75,000

b) $1 million

c) $20 million

d) $100,000

12. A product that attracts GST is sold by a manufacturer for $200 (before GST) to a retailer and then on-sold to a consumer for $400 (before GST). What is the total amount of GST collected by the Tax Office?

a) $0

b) $40

c) $20

d) $60

13. It is compulsory for most businesses to:

a) Lodge a formal application to obtain an ABN

b) Lodge a formal application to register for GST

c) Use the ABN in all GST transactions

d) Do all of the above

14. If a GST-registered business purchased a new photocopy machine for $5,500 to be used exclusively in the office, what would be the input tax credit and Tax Code applied?

a) Nil PRI

b) 1/11th of $5,500 CAP

c) 1/11th of $5,000 GST

d) 10% of $5,500 NT

Question 2 - Short answer research questions

You are required to research and provide answers to the following questions. Your work should be word-processed for submission. Some useful websites have been provided and information in your textbook.

a) What are the key features of the Tax Agents Services Act 2009 -TASA?

b) What is the process to register as a BAS Agent using the standard application?

c) What are the education and experience requirements that must be met to register as a BAS Agent?

d) REMOVED (duplicated)

e) What are the key elements of the Code of Professional Conduct for a BAS agent?

f) What are the consequences for not complying with the code of professional conduct?

g) Under the Tax Agents Services Act what Civil Penalties apply if a fee for BAS services is charged by an individual, who is NOT a registered BAS agent?

h) Describe3 ways BAS agents can keep updated on legislative and ATO changes in BAS-related matters.

i) What dates does the FBT year run from and to?

j) Which employers are eligible to pay FBT?

k) Why did the government introduce the Superannuation Guarantee Charge? What is the current rate and how is it worked out?

l) What is the purpose of the Superannuation Guarantee (Administration) Act?

m) What is the time limit for correcting GST errors?

n) Give 3 examples of Assessable Income

o) In what format is a person required to keep and record their tax records?

p) What is Luxury Car Tax?

q) How does the Privacy Act impact on a BAS Agent?

r) One of your clients, Beowulf Builders reports and pays GST quarterly. They have asked you to provide a summary of the due dates for lodging their activity statement to ensure they lodge and pay any amounts they owe to the Australian Taxation Office (ATO) by the due dates.

Quarter	Due Date
September
December
March
June

s) If instead Beowulf Builders report GST annually, advise them briefly the due date for lodging their annual GST return and paying any amount they owe the ATO on that return.

t) If a business cannot obtain an ABN from the supplier and the amount of the invoice is greater than $75 then tax will be deducted at source from all payments at what rate, and what is the tax code applied to that transaction?

Question 3 - Calabro Pty Ltd is registered as a PAYG withholder and remits instalments on a monthly basis.

All employees are paid weekly.

Complete the wages book below:

Name	TFN	Tax-free threshold	Gross Wages - weekly $	Tax $	Net Wages $
Li Na	YES	YES	860
Ken Jones	YES	YES	1,000
Irfan Raza	YES	NO	950
Isaac Cohen	NO	NO	979

Question 4 - Calculate the amount of GST that is received by the ATO from the taxable supply in the box (in attached file).

Question 5 -

(a) Explain the Wine Equalisation Tax (WET).

(b) Spirits, Wine & Beer Pty Ltd is a wholesaler of alcoholic beverages. In the June quarter the business derived $783,000 total sales, including GST and Wine Equalisation Tax (WET).

Spirits, Wine & Beer Pty Ltd uses the half retail price method for calculating its WET liability.

Calculate the WET payable for the June Quarter.

Question 6 -

(a) What are the four criteria that must be met for a business to be eligible for fuel tax credits?

(b) The Snack Food Bar is registered for GST and reports on a quarterly basis. For the year ending 31 March, they estimate their FBT liability will increase from $24,000 to $30,000 due to an increase in the number of employees. The Snack Food Bar has a pre-printed amount of $6,000 at F1 on its March activity statement.

Calculate the varied FBT instalment amount payable on the March Activity Statement.

Question 7 - Nova Riche Vehicles wants to sell a luxury motor vehicle that is initially priced at $110,000 including GST but before Luxury Car Tax (LCT). The vehicle is classified as a fuel-efficient car.

You have been asked to demonstrate to them the steps to calculate:

(a) The LCT amount (to eventually report on their Business Activity Statement), and.

(b) The final selling price of the vehicle (inclusive of LCT).

For the 2016/2017 year of income the luxury car tax threshold for fuel-efficient vehicles is $75,526 and the LCT rate is 33%.

Luxury Car Tax (LCT)	2016/17
Luxury car tax threshold
Motor vehicle for sale (GST inclusive) priced at
LCT rate
Amount exceeding the LCT threshold (GST inclusive)
Amount exceeding the LCT threshold (GST exclusive)
LCT applicable to excluded amount
Amount of LCT shown at 1E on BAS Summary
Therefore, sales price is:

Question 8 - Granny Smith operates an apple orchard in Tasmania and is registered for GST. For the 2017 income year, her total fuel expenses incurred in operating agricultural machinery were as follows:

• Diesel: $3,400 at $1.58 per litre
• Petrol: $2,000 at $1.50 per litre

The fuel tax credit (FTC) rate for diesel and petrol in 2017 is 39.6 cents per litre.

Use the basic constructive method to determine the number of eligible litres for diesel and petrol.

Calculate the fuel tax credit (FTC) she may claim.

Question 9 - Using the Tax Tables provided, calculate the PAYG Withholding Tax, HELP and Net Pay for the following employees. Use the tables provided at the end of this assessment

Employee	Gross Wages	TFN Supplied	Tax Free Threshold claimed	HELP
Tony	$840	Yes	Yes	Yes
Julie	$930	Yes	Yes	No
Malcolm	$1,400	Yes	No	Yes
Maddison	$1,850	No	Yes	No

Question 10 - All4 is a small adventure company that provides wilderness tours. The business is not a classified as a large withholder and reports quarterly. During the March quarter of the current income year, the following payments were made.

Gross wages	$8,200
Employee allowances	$632
Superannuation paid	$880
Annual Leave loading	$260
PAYG tax withheld from gross wages	$960

During the quarter additional guides were required and temporary staff were recruited from Temp Recruit Pty Ltd. An invoice for a gross payment of $2,400 was received for the work done and no ABN was quoted on the invoice provided by Temp Recruit.

In addition $327 was paid in interest to a Non-Resident on a business loan

Required:

a) Complete W1, W2, W3, W4, W5 and 4 (summary section) on the March quarter IAS.

b) Record the journal entry to record the cash Payment or Refund

Question - If All4 had $2,000 in the bank, would there be sufficient funds to pay the March quarterly BAS?          

Question 11 - Red Dragon Pty Ltd is a business selling a range of vending machines as well as providing servicing and repairs of the equipment they supply. It also derives rental income. This entity is registered for GST as an accrual payer and has chosen the option to report and calculate every quarter.

The following raw data has been provided to you, as their BAS Agent, for the quarter ended 30 September. Note: All amounts include GST where applicable.

Sales of goods	$180,000
Export sales	35,500
Other GST-free sales	2,750
Residential Rent received	22,000
Service and Repairs fees	99,000
Sale of business assets	3,500
General Business Operating Expenses	102,000
Business Council & Water Rates	1,600
Depreciation	4,500
Residential Rent Expenses	9,000
Service and Repairs Expenses	5,300
Purchase of Office Equipment	7,500
Gross Wages & Salaries	87,000
Superannuation Expenses	8,010

The extra columns have been provided to you should you wish to make a note (G1 to G20) of where each listed summary (unless to be excluded - hint) would be reported on the GST calculation worksheet. This will assist you with adding up those categorized in the same worksheet item. Two columns have been provided because some items require reporting in more than one item (hint).

Required: Complete the GST Calculation Worksheet for the September quarter.

Question 12 - Bazza operates a small business and receives investment income. He is not registered for GST, and he reports PAYG instalment income quarterly.

Revenue received for the June quarter by Bazza was as follows:

Trading income	$17,500
Residential rent received	13,800
Interest received	850
Dividend income	3,300
Sale of printer (100% business use)	500
Sale of shares	5,300
Total Revenue	41,250

Required -

(a) Calculate the PAYG instalment income.

(b) Calculate the PAYG income tax instalment assuming a PAYG income tax instalment rate of 6.70%.

(c) Prepare the instalment Activity Statement for the quarter using option 2.

Assessment Task 2 -

Question 1 - Australis Logistics is a sole trader that is registered for GST. The entity prepares a Business Activity Statement quarterly on a cash basis.

Quarterly tax obligations of Australis Logistics are

• GST (Option 1)
• PAYG Instalment Tax (Option 2)
• FBT and
• PAYG Withheld
• The business also claims a fuel tax credit for diesel used in its operating plant.

Australis Logistics provides the following information for the September quarter; figures are GST-inclusive where applicable.

Receipts	$
Sales of goods	506,000
Sales of services	19,910
Residential rent received	15,800
Commercial rent received	10,670
Proceeds from Sale of Assets	17,996
Export sales	12,600
Interest received	440
Owner contribution	5,000
Payments	$
Advertising	3,542
Bank fees	500
Commercial rent expenses	10,505
Electricity	5,500
Insurance premiums business	4,675
Interest paid	8,000
Motor vehicle running costs	15,499
Purchase of trading goods	107,998
Rates - Council and Water	3,600
Residential rent expenses	2,880
Superannuation paid	19,475
Subscriptions	1,815
Telephone	2,640
Wage & Salaries (net)	155,000
Capital Assets Purchased
Purchase of Equipment	33,242

 

Other Information:
Commissioner's PAYG Instalment Tax Rate	5.00%
Litres of diesel fuel used in operating plant	2,000
Fuel Tax Credit rates for diesel:  14.5cpl Heavy Vehicles, 40.3cpl all other business uses
FBT Instalment		4,000
Gross Wages - only deduction is PAYG Withheld
PAYG tax withheld		50,000
Depreciation		12,300

Required:

As the newly appointed BAS Agent, the company asks that you prepare and lodge their Business Activity Statement (BAS) for the September quarter, which is due on the 28th October.

For the period 1 July to 30 September, complete the following:

(a) Cash Receipts and Cash Payments books

(b) GST calculation worksheet for the BAS

(c) Business Activity Statement

Question 2 - You are required to complete the Instalment Activity Statement (IAS) for the September quarter for Van Nguyen, a company director.

The current IAS form allows selection of either Option 1 or Option 2 for PAGY Instalments, as the September quarter is the first quarter of the financial year. Van has decided to use Option 2.

His income for the quarter consists of:

• Gross wages $20,000
• Gross rental income of $11,000
• Bank interest of $5,000
• Franked dividends received $9,000.

The ATO Instalment Rate for Van Nguyen is 4.5%.

Required - Prepare the IAS for Van Nguyen for the September quarter.

Attachment:- Assignment Files.rar