All Questions need to be answered including mcq . RELEVANT CASES NEEDED TO BE INCLUDED IN EVERY QUESTION WITH SECTIONS
Name_StudentID_CourseCode BULAW5916 2020 Semester 1 Final assessment Please read ALL of these instructions carefully before you commence: Time to complete: 3 hours 40 minutes (220 minutes) During the assessment: · To add your answers to the assessment word document you will find a box under each question where it asks you to Click or tap here to enter text. Click on this box and begin typing your answers. · You can leave Moodle at any time once you have downloaded your assessment, HOWEVER the clock will continue to count down (closing down your internet browser will save you bandwidth issues if your internet is not always reliable). · If you leave Moodle at any time, you MUST return to the assessment area on Moodle and click on Continue the last attempt before the time runs out to upload your completed assessment document. To complete & upload your assessment: · Save the document to your desktop using Your Name_StudentID_CourseCode · Return to the Moodle assessment area and click on Continue the last attempt button to return to the assessment. · Scroll down to Question 1, and click on the paper icon to upload your completed assessment. · Click Finish attempt and follow the final prompts to submit your assessment. If you experience technical issues during your assessment, please don’t panic. Email your lecturer explaining the issue. It would be good to provide a screenshot with your email. The lecturer will get in contact with you as soon as possible to discuss how to proceed. If you are unable to upload your completed assessment document before your time runs out, please email your lecturer with your assessment document attached and a clear explanation as to why you were late. Your lecturer will contact you to discuss. Please answer 5 out of the 6 questions below. If you answer all 6 questions, only the first 5 will be marked. Question 1 ABC Pty Ltd sells upmarket washing machines. It had $200,000 stock on hand at the beginning of the 2017/2018 financial year. It purchased $50,000 of additional trading stock during the income year. The closing stock on hand was $130,000. At the beginning of the 2018/2019 financial year ABC Pty Ltd had $130,000 stock on hand. It did not purchase any stock during the year as it was having financial difficulties. In fact, in September 2018 ABC gave two washing machines to a creditor as payment in full of the debt it owed to that creditor (ABC owed the creditor $2,000). Each washing machine had cost ABC $1,000 and ABC would usually sell each washing machine for $1,750. ABC did not sell any stock during the 2018/2019 financial year. Towards the end of that year, a flood swept through the warehouse and all stock was destroyed. ABC did not purchase any replacement stock. Required: Advise ABC of the tax implications for each of the 2017/2018 and 2018/2019 financial years based on the information above. Where appropriate, support your answer with legislative authority.20 marks Click or tap here to enter text. Question 2 If you answer question 2, please answer question 2(a) and (b) (a) Fred has been unemployed for six months. He has been using the Jobs R Us Pty. Ltd. employment agency for the past four months to try to find employment. In March of this year, a new case manager, Bert, was given the task of finding a job for Fred. Within a week, Bert, had found Fred a full time job. Fred bought a $500 gold watch and gave it to Bert to say thank you. Advise Bert as to whether the watch is assessable income. Refer to case law and legislation in your answer.10 marks Click or tap here to enter text. (b) In addition to Bert’s fortnightly salary, his employer pays his telephone and internet package of $120 per month, and as a reward for being Employee of the Month for June, Bert received a $500 bonus. Advise Bert of the tax consequences of the above employment package. Refer to case law and legislation in your answer10 marks 20 marks in total Click or tap here to enter text. Question 3 On 6 November 1985, Patricia bought a property in South Yarra. This property included two old tennis courts next to the house, which were in poor condition. She purchased the property for two reasons: · So that she and her family could live in the house; and · So that she could build two apartments on the land where the tennis courts were, and sell them at a profit. After Patricia purchased the property, the tennis club next door to her property in South Yarra offered to buy the old tennis courts from her, but only if Patricia restored them to good condition. Patricia accepted the club’s offer rather than going ahead with her plan to build and sell the apartments. Patricia spent $80,000 on preparing the tennis courts for sale. This involved a great deal of work. She had to resurface the tennis courts, and build a new fence between her house and the tennis courts. She then sold the tennis courts to the tennis club in the current tax year for $200,000. Required: Please discuss whether Patricia would be assessable on the $200,000. Where appropriate, refer to case law and legislation in your answer20 marks Question 4 Bert spends $10.60 a day travelling to work, and a further $65 a day sending his daughter Belle to a childcare centre. Bert has just received the monthly account for the childcare centre totalling $1,625, which he needs to pay immediately. Bert owns a newspaper publishing company. He has paid a membership fee with respect to his personal membership of the World Association of Newspapers, amounting to $3,300, and he has bought a new computer for $2,200 that he keeps in his study at home. Bert has recently purchased a beach house near Geelong. The property has been rented out to Bert’s sister since he purchased it. He took out a 25-year loan to finance the purchase. His interest payments are $7,200 a year. Bert also claims lawn-mowing expenses of $100 per month with respect to his beach house. Required: Advise Bert about the deductibility of the above expenses. Where appropriate, refer to case law and legislation in your answer 20 marks Click or tap here to enter text. Question 5 If you answer question 5, please answer all 10 parts. Each part is worth 2 marks. Please click on only one check box option in answer to each of these parts. For example, if you think the answer is A, please click on the checkbox next to A 1. TaP Plumbing Pty. Ltd. had $200,000 stock on hand at the beginning of the 2018/2019 financial year. It purchased $50,000 of additional trading stock during the income year. The closing stock on hand was $130,000. What are the tax implications for the 2018/2019 financial year? A. ☐ Net deduction $50,000 B. ☐ Net deduction $130,000 C. ☐ Net deduction $70,000 D. ☐ Net deduction $120,000 2. Which of the following statements about the taxation of trading stock is correct? A. ☐ Purchases of trading stock are treated as capital for tax purposes B. ☐ When trading stock is purchased and a deduction is claimed under s70-5(2)(a), the amount of the deduction depends on whether the trading stock is valued at cost, market selling value or replacement value C. ☐ For the purposes of s70-35, trading stock should always be valued at cost to obtain the lowest tax bill D. ☐ For the purposes of s70-35, the taxpayer can give trading stock a closing value of either cost, market selling value or replacement value 3. Which of the following items would not be trading stock under s70-10? (i) Land held by a property trust (ii) Confidential documents held by a research company (iii) Seeds purchased for sale by a plant nursery A. ☐ (i) and (ii) B. ☐ (i) and (iii) C. ☐ (ii) and (iii) D. ☐ (ii) only 4. Which of the following are not trading stock? A. ☐ Bees kept for use in a honey production business B. ☐ Horses used in a city horse carriage tour business C. ☐ Undeveloped land owned by a land developer D. ☐ Partly finished computers of a computer manufacturer 5. For the purposes of the Goods and Services Tax (GST), when a registered business makes an input taxed supply it means that: A. ☐ It is liable for GST on the supply, but it is not entitled to an input tax credit on GST paid on its business inputs affecting that supply B. ☐ It is liable for GST on the supply, and is entitled to an input tax credit on GST paid on its business inputs affecting that supply C. ☐ It is not liable for GST on the supply, and is entitled to an input tax credit on GST paid on its business inputs affecting that supply D. ☐ It is not liable for GST on the supply, and is not entitled to an input tax credit on GST paid on its business inputs affecting that supply 6. For the purposes of the Goods and Services Tax (GST), when a registered business makes a GST-free supply it means that: A. ☐ It is liable for GST on the supply, but is not entitled to an input tax credit on GST paid on its business inputs affecting that supply B. ☐ It is liable for GST on the supply, and is entitled to an input tax credit on GST paid on its business inputs affecting that supply C. ☐ It is not liable for GST on the supply, and is entitled to an input tax credit on GST paid on its business inputs affecting that supply D. ☐ It is not liable for GST on the supply, and is not entitled to an input tax credit on GST paid on its business inputs affecting that supply 7. Cheng runs an accountancy practice, and has purchased a photocopier for $5,000 to use in his practice. The amount of GST included in the purchase price is: A. ☐ $500.00 B. ☐ $454.55 C. ☐ $475.55 D. ☐ $50.00 8. Which of the following statements is correct? A. ☐ If an employer provides a benefit to anyone other than an employee, the benefit cannot be a fringe benefit B. ☐ If anyone other than an employer provides a benefit to an employee, a fringe benefit