Which accounts will enter the total allowable deductions

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Reference no: EM132669872

Expenses

Membership of Shoe Designers Association 650

Purchase of materials for use in the classes. 10,500

On 15 June 2018 Jimmy bought $1,500 of new materials for which he had not yet paid.

Purchases of stock for use in manufacturing shoes 965,000

Drycleaning of army reserve uniform 200

Purchase of uniforms for himself and his staff

That was branded with the shops logo 5,800

Motor vehicle expenses for Jimmy his records showed 80% business use 25,000

Parking fines incurred whilst attending client premises 300

Jimmy often took some work home with him and incurred the following expenses, he estimated that he spent around 30% of him time working from home

Home electricity 1,200

Home insurance 700

Home Rates and taxes 1,400

Donation to Red Cross 500

Annual Shoe Designers Conference in Paris 350

Travel expense to attend the conference included

Airfares 5,000
Accommodation 3.000
Taxis 350
Meals 1,000
Sightseeing eg Eiffel Tower 500

Wages for staff 890,000

Payment to his sister for taking his place at the sewing classes whilst he was on holiday.

If he had paid a casual from an employment agency it would have cost $2000 but he wanted to help out his sister and paid her a bit more. 3500

Superannuation for employees 9.5% of gross wages Personal superannuation 25,000

Jimmy took out a loan on 1 September 2017 to help with the purchase of some new plant and equipment. He borrowed $27,300 of which $17,300 went towards the purchase of new plant and the rest he used as spending money on his holiday. The repayments were due on the 1st day of each month starting as from 1 October 2017 of $1500 consisting of $1300 capital and $200 interest. 13,500
The costs associated with obtaining the loan were $400 and the loan was for 3 years
On 30 June 2018 Jimmy prepaid the loan repayments for the next 12 months 1 July 2018 to 30 June 2019 18,000
Payment to his accountant for completing his income tax returns 4,300
Advice from his legal advisor on the benefits of changing his structure from its current mode of a sole trader to a company 1,500

Problem 1: From the above information which accounts will enter the total allowable deductions?

Reference no: EM132669872

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