Reference no: EM132253433

WRITTEN ACTIVITY

For this assessment, you will need to perform the following tasks.

You will require access to the following for this activity:
• Common office equipment, technology, software and consumables
• An integrated financial software system and data

Your task is to read the following scenario and complete a full tax return for this client.

Scenario:

A new client Stephen John Murphy has arrived at your office. Your receptionist has greeted him, provided him with coffee and has ushered him into the interview room. During the initial interview you identify that he is a sole trader and needs to lodge a tax return.

The following information is provided by Stephen:

• He is an Australian resident
• Has not changed his name since the last return
• DOB: 15/12/1975
• Address: 15 Kangaroo Lane, BentmoreVictora 8888
• Post address: PO Box 555 Bentmore Victoria 8888
• TFN: 666 666 666
• ABN: 12 222 222 222
• Ph: 03 555 5555
• Sales for the year: $294,423
• Expenditure: $262,452
• Personal drawings: $32,000
• Stephen also received income from a rental property of $22,000
• Stephen paid mortgage payments on his rental property at $256 per week
• Stephen had repairs to his rental property totaling $2,435
• Insurance for rental property: $374
• Bank interest: $231
• Stephen is registered for GST
• Stephen purchased a new laptop computer and telephone for work purposes. $2500 and $1250 respectively
• Stephen has $12,400 outstanding for debtors
• Stephen has $2,300 outstanding to creditors
• Private health insurance: Yes with no loading
• Stephen received a box seat at the Football from a client with a value of $2000

Now you must complete the following activities:

Task 1 Create a checklist that would assist you to with identifying all the relevant details from your client.

Task 2 Create a cash flow summary for Stephen

Task 3 Create a depreciation schedule for Stephen

Task 4 Create a profit and loss statement for Stephen

Task 5 Create a balance sheet for Stephen

Task 6 Answer the following questions:

a. What rate of tax should Stephen be paying?
b. What is his charge for the Medicare levy and surcharge?
c. What superannuation should Stephen have received?
d. What was Stephen's assessable income?
e. What was Stephen's tax payable or refund amount?
f. Did Stephen have any fringe benefits? If so what were they?
g. How would you calculate the fringe benefits for reporting purposes?
h. Is there any payroll tax due or paid?

Task 7 Create a BAS for Stephen for 12 months.

Task 8 Lodge Stephens taxation electronically (include a copy with your assessment)

Task 9 Write a short summary of the financial position for Stephen

You will need to answer all the above questions and address each point for competency in this unit. You must ensure you provide copies of each item above to your trainer.

After you have completed this activity you will have to hand it in.

RESEARCH ACTIVITY

For this task you must research each of the following topics, and complete a detailed report on your findings. Your report will need to be completed and submitted in a professional, word processed, format. The report must be 1000 words minimum in length. The research topics are:

1. Identify and explain ethical considerations and legislative requirements relevant to the preparation of tax documentation for legal entities, including:
a. Conflict of interest
b. Responsibilities of tax agents including code of professional conduct obligations under the tax agent services act (TASA) and tax agent services regulations (TASR)
c. Government tax policy documents issued by reviews, treasury and board of taxation
d. Explanatory materials in relation to legislation
e. Statutes
f. Court and administrative appeals tribunal decisions
g. Commissioner of taxation's interpretive guidance in rulings and determinations
2. Explain critical and key elements of Australian tax law as it relates to tax documentation for legal entities such as companies, trusts, partnerships and sole traders including:
a. The rules and principles of Australian tax law, with an understanding of the legal environment in which these principles operate, basics of the legal system, constitutional considerations and separation of powers
b. The key aspects of income tax law covering concepts of residence and source, related elements of international tax, assessable income, deductions, tax rebates and offsets, and tax accounting
c. Goods and services tax (GST)
d. Taxation aspects of superannuation law
e. Administrative aspects of the taxes identified above including documentation, tax collection and withholding mechanisms, assessments, obligations, rulings, penalties and audits
f. Specific and general anti-avoidance tax rules
3. Describe the key sources of information and taxable transactions data required to calculate taxable income, including:
a. Allowable deductions
b. What are Capital gains and how are they calculated or identified?
c. Financial adjustments such as write-offs and revaluations
d. Income
e. Payments
f. Purchases
g. Superannuation payments
4. Describe the key features of organisational policy and procedures relating to the preparation of tax documentation for legal entities
5. Outline the key accounting principles and practices relevant to the preparation of tax documentation for two different types of legal entities.

SHORT ANSWER QUESTIONS

Answer the following questions either verbally with your assessor or in writing.
1. What are four things you would need to identify prior to lodging tax documentation?
2. Define both cash and non-cash(accrual) accounting.
3. Describe each of the following business structures and how the structure affects taxation.
a. Sole traders
b. Partnership
c. Trust
d. Company
e. Joint venture
f. Self-managed super fund
4. Describe a depreciation schedule and what it is used for. Provide an example.
5. What is an allowable deduction? Describe in detail.
6. What are the 6 types of rulings for income tax purposes?
7. Australian residents must lodge a tax return if they meet certain criteria. What are they?
8. Describe what will happen when you lodge a tax return.
9. What is an amendment? Describe the process and why you would do it.

Attachment:- Assessment Guide.rar