Reference no: EM13306952
Part 1: Case study
Periwinkle Pty Ltd (Periwinkle) is a bathtub manufacturer which sells bathtubs directly to the public. On 1 May 2013, Periwinkle provided one of its employees, Emma, with a car as Emma does a lot of travelling for work purposes. However, Emma's usage of the car is not restricted to work only. Periwinkle purchased the car on that date for $33,000 (including GST).
For the period 1 May 2013 to 31 March 2014, Emma travelled 10,000 kilometres in the car and incurred expenses of $550 (including GST) on minor repairs that have been reimbursed by Periwinkle. The car was not used for 10 days when Emma was interstate and the car was parked at the airport and for another five days when the car was scheduled for annual repairs.
On 1 September 2013, Periwinkle provided Emma with a loan of $500,000 at an interest rate of 4.45%. Emma used $450,000 of the loan to purchase a holiday home and lent the remaining $50,000 to her husband (interest free) to purchase shares in Telstra. Interest on a loan to purchase private assets is not deductible while interest on a loan to purchase income-producing assets is deductible.
During the year, Emma purchased a bathtub manufactured by Periwinkle for $1300. The bathtub only cost Periwinkle $700 to manufacture and is sold to the general public for $2,600.
(a) Advise Periwinkle of its FBT consequences arising out of the above information, including calculation of any FBT liability, for the year ending 31 March 2014. You may assume that Periwinkle would be entitled to input tax credits in relation to any GST-inclusive acquisitions.
(b) How would your answer to (a) differ if Emma used the $50,000 to purchase the shares herself, instead of lending it to her husband?
Part 2: Question
An extract of the asset register of Alpha Pty Ltd (‘Alpha') for the 2012-13 income year is as follows:
All depreciable assets are for 100% business use and Alpha uses a low-value pool for all eligible assets. The closing value of the low-value pool at 30 June 2013 was $5,300.
Alpha purchased a printer on 5 June 2014 for $700.
Advise Alpha of the income tax consequences arising out of the above information for the 2013-14 income year.
|
Develop the logic for a program that allows a user
: The exact number of household records has not yet been determined, but you know that Marengo has 7 households. Develop the logic for a program that allows a user to enter each household size and determine the mean and median household size in Mare..
|
|
Determine the work done by the gas on the bullet
: Assuming the origin is placed where the bullet begins to move, the force (in newtons) exerted by the expanding gas on the bullet is 18000 + 7000x - 20000x2, where x is in meters.
|
|
Prepare the journal entries to record the transfer
: On February 1,2014, Razorback Corporation decides to transfer its available-for-sale securities to the trading category. These securities had been purchased for $9,400 early in 2013 and had a fair value of $11,700 on December 31, 2013. On Febru..
|
|
Implement a cash register applet as demonstrated below
: A section containing 9 buttons in a 3x3 layout where each button corresponds to an item to be purchased and an associated item cost. The example below has each button correspond to a common fruit.
|
|
Advise periwinkle of its fbt consequences
: Advise Periwinkle of its FBT consequences arising out of the above information, including calculation of any FBT liability, for the year ending 31 March 2014.
|
|
How fast must you travel to accomplish this
: You have two weeks vacation and want to travel to a gambling space colony located 3.22 x 10^14 meters from Earth. how fast must you travel to accomplish this
|
|
Insurance policy
: How to you adjust a journal entry when is says "analysis of "company name" insurance policy shows $2,550 of coverage has expired"?
|
|
What velocity does the boat ultimately achieve
: If a boat can move in still water at 28 mph, but it is moving west to cross a stream that flows 7.2 mph south. What velocity does the boat ultimately achieve
|
|
Relevance versus faithful representation
: 1. Relevance versus Faithful Representation. The fair value of the build- ing may provide more relevant information to decision makers, but fair value estimates are not as free from error as historical cost information.
|