ACCT6005 Taxation Law and Practice
Task:
In this assignment, you will be provided with a business case study (below) and you will prepare a business activity statement (BAS) for the business.
This assessment covers the topics of Payroll, GST & FBT (Topics 1 – 4) and it assumes that you have completed all activities and tasks for these weeks. This is an individual assignment
Assessment requirements
• Completion of working papers and the Business Activity Statement (BAS) using the excel template provided in the assessment tasks and submission section of the unit’s MySCU site. Your completed excel document will then be submitted via a turnitin submission link provided.
• Completion of a one hour online timed test to be attempted once you have completed the BAS and the associated working papers. This test can be located in the assessment tasks and submission section of the unit’s MySCU site.
Business case study information
Sally owns the business operating as Planet Pets. Sally is a sole trader for tax purposes. Planet Pets manufacture chemical free toys for domestic animals and designer collars, for customer’s pets. Both of their products are manufactured and warehoused on the Gold Coast and sold to various wholesalers and retail outlets throughout Australia. Planet Pets has five (5) employees.
Sally has asked for your assistance in completing the September quarter 2021 Business Activity Statement (BAS). Sally is registered for GST and operates on an accruals basis. To assist you, Sally has provided you with the following information about the activities of the business for the September 2021 quarter.
Sales and receipts received for the quarter ended 30 September 2021
Sales for the quarter from toys and collars $505,000
Customer collections from August sales $125,000
Bank interest received $125
Sale of office equipment 31 July 2021 used in the business $3,500
Job keeper payments received for the month of July 2021 $4,500
Expenses and payments for the quarter ended 30 September 2021
Materials and supplies purchased in the September quarter $250,000
Payments for materials relating to August supplies $75,000
New machine purchase via loan on 1 September 2021 $30,000
First repayment of the machine loan 30 September 2021 $1,000
Freight charges for the new machine $220
Subcontractor wages (not registered for GST) $2,200
Customer service training for staff $1,200
Staff amenities (biscuits, milk, tea and coffee GST free) $150
Yearly staff function at a local restaurant ($120/head) * $720
Jewels for dog collars imported from the US ** $5,000 ($AUD)
Freight charges for the jewels** $350
Airfares for staff to attend tradeshows in Sydney $3,000
*The staff function would be considered minor and infrequent and be considered entertainment for the purposes of income tax, hence not tax deductible.
** The US company did not charge GST on the jewels. The Australian freight company did charge GST.
*** Sally had booked a stall at a tradeshow and a was a guest speaker at the event. Due to lockdowns associated with COVID, only two of the staff could attend this event. The airline did not refund the unused amount of airfares of $1,500 and have provided the business with a credit to be used at a later date.
Salary and Wages
Planet Pets has 5 employees. They are paid weekly and all employees are entitled to the tax-free threshold and superannuation as per the superannuation guarantee. Wage details for each of the employees are as follows;
Simone (permanent staff member) $65,000 per annum
Max (permanent staff member) $45,500 per annum
Molly $32,500 per annum
David and Luke are casual employees and they are paid on the basis of the number of hours they work each week. The hours worked for David and Luke are outlined below.
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Week ending
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David $25 per hour
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Luke $15 per hour
|
|
2 Jul
|
15
|
10
|
|
9 Jul
|
10
|
8
|
|
16 Jul
|
10
|
8
|
|
23 Jul
|
12
|
10
|
|
30 Jul
|
0
|
5
|
|
7 Aug
|
0
|
5
|
|
14 Aug
|
15
|
10
|
|
21 Aug
|
5
|
10
|
|
28 Aug
|
10
|
8
|
|
4 Sep
|
12
|
0
|
|
11 Sep
|
11
|
8
|
|
18 Sep
|
20
|
10
|
|
25 Sep
|
10
|
5
|
Business Activity Statement information
Planet Pets had previously provided one of their former staff with a motor vehicle and the business was paying fringe benefits tax (FBT) on this. The FBT was calculated using the operating cost method and had a business use of 85%. The staff ceased their employment with Planet Pets on 30 June 2021 and the motor vehicle is now garaged and not being used. The ATO currently have Planet Pets paying FBT instalments of $1250/quarter. Planet Pets would like you to consider if this tax needs to be paid for the September 2021 quarter?
The ATO have advised Sally last month that she has a personal quarterly tax instalment payable of $7,500/quarter. She has chosen to start paying this fixed to the ATO commencing in the September 2021 quarter.
There are no liabilities for WET, LCT or FTC
All amounts are GST inclusive unless otherwise stated.
