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Helen and Gerald incorporated Zion Ltd in 2008. Zion Ltd manufactures and sells wine barrels in Margaret River, Western Australia. The business had been successful until late 2013 when Helen and Gerald, the directors of the company, decided to expand the business to manufacture and sell wine barrels interstate. Zion Ltd had to move from the existing warehouse to a larger warehouse which in turn cost more in rent.
Despite repeated requests, Zion Ltd has not paid Bendu Ltd $40,000 owed for the last six months' rent on the premises. As a result of non-payment, the company could be wound up in insolvency.
REQUIRED:
With reference to the Corporations Act 2001 (Cth) and any relevant cases explain the process available for Bendu Ltd to recover the amount owed by Zion Ltd.
Two thirds of operating expenses relate to sales activities. The company is subject to 30% income tax. How much is the net income (net loss) during 2020?
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