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QUESTION 1 (a) Michelle ran her own accountancy business. During the year she was persuaded to change premises which she ran her business from, and which she rented. A new building not far from where she ran her business had been completed. The owners of this new building agreed to give to Michelle $45,000 over 12 months if she agreed to move to their premises. Michelle accepted this offer. (b) Roger was a tax adviser. He had a very wealthy client who asked Roger for some advice on how best to structure a new business the client was starting up. As a result of the advice given the client paid 15% less tax than had been paid in the past. The client paid Roger the fee of $7,000 he had charged. Because he was very pleased with the advice he had been given he also gave Roger another $2,000 as well as the $7,000. (c) Bill & Ben Cookies had a number of agreements with overseas companies to produce selected biscuits from each overseas company's biscuit range in Australia. One of these companies, Wharfdale biscuits, wrote to Bill and Ben Cookies stating it wanted to withdraw the right of Bill and Ben Cookies to produce its biscuits. After much negotiation it was agreed Bill and Ben Cookies would cancel their agreement with Wharfdale and not produce any of Wharfdale's biscuits in Australia. Wharfdale paid Bill and Ben Cookies $70,000 on the 30th September for cancelling the agreement. Discuss whether the amounts referred to in each question are assessable income for Australian tax purposes. Fully explain your answer.. AND QUESTION 2 Joe runs his own small business. Unfortunately, one day whilst out visiting a client, he was severely injured in a car accident and left a paraplegic. As a result of the accident Joe has had to make the following modifications to enable him to continue his business. (i) $3,000 of changes to his car to enable him to drive to work; (ii) $5,000 for parking expenses immediately next to his office; (iii) $8,000 for expenses in modifying parts of his office to allow him to work more efficiently, such as ramps and rubber protective strips against the walls. (iv) New clothes to enable him to be better able to do his work. (v) Special adapted communications equipment for being able to answer the phone and to be able to talk to his computer to give commands and for it to take dictation (notes from spoken word. All medical evidence agrees that after his accident Joe could not physically get to work except by car, and by parking close by his work place. All other modifications made, including his special clothing, also make running his business far easier. Real estate experts however suggest the modifications made by Joe to his office have actually decreased the value of the premises, and may well impact on the ease of access for clients, thus perhaps having an adverse impact on the overall profitability of the business. Are the above expenditures deductible for Joe? Fully explain your answer.
Edison Company manufactures wool blankets and accounts for production costs using process costing. The following information is available regarding its May inventories.
The maximum amount of the stock redemption proceeds under Sec. 303 is determined by summing all of the following except
Why must preferred stock dividends be subtracted from net income in computing earnings per share? Why is common stock usually not issued at a price that is less than par value?
How would the carrying value of bonds payable be affected by the amortization of each of the following?
Prepare a statement of cash flows for the year 2010 for Aero Inc.
As a senior manager of your information technology group, discuss how you would demonstrate, by example, the importance of security and then propose a method for creating a "security aware" culture. Provide specific examples to support your respon..
Prepare a system flowchart, following good flowcharting practices including annotations, documenting the GCO system as described above. Use VISIO or another flowcharting tool of your choice.
Justify how the reporting requirements of the PCAOB reduce the chance of financial fraud. Illustrate the responsibilities of an auditing firm to detect fraud during the audit process.
Leslie died on October 31, 2011. Prior to 2009, Leslie had never made any gifts, but in 2010 she made some transfers. Specifically, on January 10, 2010, Leslie gave her vacation beach house to her five children as tenants in common.
Compute the efficiency variances for direct labour and direct materials. Provide likely explanations for variances. Do you have reason to be concerned about you performance evaluation? Explain.
Nicole, Inc. uses IFRS for its external financial reporting. During 2011, an employee of the company was injured in the factory. Discussions with corporate attorneys resulted in a determinatin that the company would be required to pay between $1,5..
Which of the following is not a disadvantage of using the FIFO cost flow assumption?
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