Reference no: EM132275022

OBJECTIVE

You must hand in written accounting records that logically record and compress the financial data, including cash receipts dissection journal and cash payments dissection journal and other accounting records, as per appendix 4.

Most important is a calculation of the taxable income of the taxpayer, splitting up primary production income and non primary production income.

Prepare tax return for one year using the 2015 tax return available through "forms" on the ATO website.

Estimate tax payable after offsets. Draft a letter to your farmer advising him of his tax obligations and results.

FACTS

Dave Rudd is a farmer who owns a large property in outback Australia. He is single, an Australian resident, and has no dependants.

Dave's business is not in the SBE system, and is not in receipt of any personal services income.

The majority of the transactions are played out in the board game squatter. See also appendix one.

The game will be played during class time: unless Bruce specifically directs you to attend at a specially appointed time.

One member of the group (called the bookkeeper) shall record the transactions for analysing at a later date. Refer a separate cash records handout (its heading is "FIRST YEAR"). One member of the group will roll the dice and move the piece around the board and make the business decisions. The last group member will either be given a special role by Bruce, or responsible for checking the bookkeeper and helping to gather the necessary information to enable the accounting/taxation records, to be accurate and complete.

All players should thoroughly familiarise themselves with the terms used by sheep farmers (see assignment squatter rules put up on the Learning Hub) before they play the board game.

The bookkeeper should familiarise themselves with the cash records handout .

The farmer owns and manages a sheep property, which began three years before the opening roll of the dice to begin the game.
His taxable income for the first three years was
Last year $25,000
Two years ago $18,000
Three years ago $22,000
He has elected to be in the averaging system. See also appendix two for other options.

List of accounting records required :

Note: the money you trade with is assumed to be in your business bank account; you hold a separate personal bank account.
- Cash receipts and cash payments dissection journals
- Reconciliation of bank account
- Statement of cash at bank balance ( calculating the bank amount at end, you should actually count your bank/money at the end of each year)
- Sheep working account
- Reconciliations of sheep per stocktake to the sheep working account.

You must calculate the taxable income on a sheet of paper before proceeding to complete the tax return. Show all workings on this sheet, hand in a copy of this sheet, ensuring references clearly indicate the item in the tax return.

Purpose

The assignment will require you to identify taxation liabilities by analysing a farmer's transactions.

It requires accounting data to be analysed to determine the nature of the primary producer's taxation options. Trends are analysed to develop understanding of the effects over time of taxation decisions made in previous periods.

Finally, it begins the understanding of the need to have adequate record keeping systems, to provide an audit trail suitable for tax compliance programs.

Attachment:- Assignment on Primary Producers.rar