QUESTION 1 (15 MARKS) Francis is an experienced businessman working in the hospitality industry for many years. He has recently purchased an old restaurant. The commercial kitchen in the restaurant...

QUESTION 1 (15 MARKS) Francis is an experienced businessman working in the hospitality industry for many years. He has recently purchased an old restaurant. The commercial kitchen in the restaurant was in poor condition. Replacing the whole commercial kitchen will cost Francis $23,000. The cost of repairing the kitchen appliances will be $4,900, however some parts may not be available in the market anymore as these appliances are too old and obsolete. Francis decided to replace the commercial kitchen with brand new modern appliances because new modern appliances in the market have better features and durability. Advise Francis on the deductibility of the above transactions. Your advice must be supported by reference to relevant legislation and principles of tax law.QUESTION 2 (10 MARKS) Tom owns a business called Tom’s Band in Westfield Sydney selling musical instruments. Tom also teaches guitar on a casual basis at the Sydney Guitar School a local musical college. The following are Tom’s receipts during the 2019-20 financial year: Particulars $ Tom’s Band sales include $2,500 from sales of musical instruments made last year. In addition, there is a sale of $3,200 made in April of the current year but not yet paid. 220,000 Salary from the Sydney Guitar School. This includes Long Service Leave of $4,200 which Tom is going to take in July of the following year. 53,000 Tom has withdrawal from bank. This was made up of the original capital deposited of $20,000 plus interest of $1,000 which was paid last year and reinvested. Interest of 5% was paid on the invested money. 22,050 Fully franked dividends includes franking credits of $5,143 were attached. 12,000 Unfranked dividend 4,000 Required: Assuming Tom does not have allowable deductions, you are required to calculate Tom's taxable income and net tax payable.