What is the purpose of maintaining a franking account

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Reference no: EM133354110

Question: During the 2020/21 income tax year, Brilliant Ltd, a resident company, received a dividend distribution of $900,000 from another Australian resident company, Call Saul Ltd. The dividend distribution of was 80% franked. Assume the company tax rate applicable to both Brilliant Ltd and Call Saul Ltd is 26%.

Required: (a) Is BrilliantLed required to maintain a franking account? What is the purpose of maintaining a franking account? (b) What arethe total tax consequences for Brilliant Ltd from receiving the 80% franked$900,000 distribution from Call Saul Ltd?

Reference no: EM133354110

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