Homework SourseSuppose you work as an assistant accountant for an Accountin
Suppose you work as an assistant accountant for an Accounting firm called Maan pty ltd, an accounting firm, firm has many clients. Firm is involved with many accounting functions such Bookkeeping, tax, BAS, GST and other requirements. One of their client Marry came to you after July 2015 to lodge her tax returns. Mary has provided you the following information. Read this information carefully and answer below tasks. You must answer all tasks to get satisfactory performance in this assessment activity.
Mary has advised you she runs a small tapware business from her home, which is not GST registered. Her ABN is 84 491 702 643.
Details were as follows:
Sales were $58,000
Costs were as follows:
Purchase $28,000
Advertising $5,500
Bank charge $1,000
Telephone $4,500
Stationery $1,500
Speeding fine $386
12-month business insurance payment on 1 March 2015
$2,400
Suzuki 300o C.C travelled for business 1800 kilometres
Mary’s TFN is 456 896 543. Mary has resided at Bass Hill for the past four years and would like all correspondence sent there. Her business address is the same as home address, 13 George St, Bass Hill NSW 2777
Mary advises that she owns 2,750 Coles share and received fully franked dividend as follows:
14/10/2014 Franked Dividend $110 Imputation credit $47
14/04/2015 Franked Dividend $126 Imputation credit $54
Mary sold Telstra (TLS) shares 29 June 2015: 3000 TLS shares @4 per share
Mary bought Telstra (TLS) shares 2nd November 2011: 3000 TLS shares @3.40 per share
Interest received from ANZ bank $2,300
Mary (DOB: 03/05/1977) is married to David. Mary works part time at Coles as night filler
During the work at Coles she has following expenditure:
Purchase working shoes $120
Washing uniform 38 weeks
WHS training paid $420
Tax agent fess $120
Donation to Salvation Army $50
You are engaged to prepare Mary’s tax return of 2014/15. You need to communicate with her and complete the following tasks for her case.
a)
Decide which tax documents are required to prepare Mary’s taxation. (1.1)
b)
There could be many legal changes in terms of recording and reporting. Which sources would you use to make sure Mary is legally complaint according to changes in tax laws and other updates? (1.2)
c)
Identify Mary’s assessable income and allowable deduction. You may use following table: (1.3)
Assessable Income
$ Amount
Allowable deduction
$Amount
d)
While collecting tax documents from Mary, there could be some discrepancies. What could be those discrepancies? What actions wold you take identifying and solve them?
| 12-month business insurance payment on 1 March 2015 | $2,400 |
Solution
Part (a):
Documents required to file small business return in schedule C are as following:
Part (b):
Mary being a sole proprietor shall file income tax return in form 1040. She must comply with the requirements of the form to prepare her tax return for a year. Disclosing correct and proper information in relation to the amount of revenue earned by her business and taking deductions for allowable expenditures to ascertain the assessable profit is a must.
Part (c):
Assessable income
Amount ($)
Sales
58000
Interest received from ANZ bank
2300
Capital gain
1800
Franked dividend
2014
110
2015
126
62336
Allowable deduction
Amount ($)
Purchase
28000
Advertising
5500
Bank charge
1000
Telephone
4500
Stationery
1500
Speeding file not allowed
-
Insurance premium (Mar to Dec)
2000
Donation to Salvation army
50
42550
Part (d):
There could be following discrepancies:
The provisions of income tax shall be followed properly to identify the discrepancies and these shall be corrected to ascertain the assessable income of Mary.
| Assessable income | Amount ($) |
| Sales | 58000 |
| Interest received from ANZ bank | 2300 |
| Capital gain | 1800 |
| Franked dividend | |
| 2014 | 110 |
| 2015 | 126 |
| 62336 |
