Question 1 (10Marks)Alan is an employee at ABC Pty Ltd (ABC).


Questio
n 1 (10
Marks)
Alan   is   an   employee   at   ABC   Pty   Ltd   (ABC).   He   has   negotiated   the   following 
remuneration bundle after a while ABC:

salary of $300,000;

Payment
of Alan's inconstant phone account ($220 per month, including GST). Alan is below a 
two
-
year  cont
ract  whereby  he  is  required  to  pay  a  fixed  sum  each  month  for 
unlimited manner of his phone. Alan uses the phone for operation
-
related purposes singly;

Payment
of Alan's children's develop fees ($20,000 per year). The develop fees  are GST 
free.
ABC  so  provided  Al
an  after a while  the  latest  inconstant  phone  handset,  which  consume  $2,000 
(including GST).
At  the  end  of  the  year  ABC  hosted  a  dinner  at  a  local  Thai  restaurant  for  all  20 
employees and their partners. The sum consume of the dinner was $6,600 including GST.
(a)
Advise  ABC  o
f  its  FBT  consequences  arising  out  of  the  above  notification,  including 
calculation of any FBT jurisdiction, f
or the year completion 31 March 2017
. Assume that ABC 
would be entitled to input tax credits in aspect to any GST
-
inclusive acquisitions.
(b)
How would your
tally to (a) disagree if ABC singly had 5 employees?
(c)
How would your tally to (a) disagree if clients of ABC so sheltered the end
-
of
-
year 
dinner?
Question 
2
(10
marks)
Two years ago Peta purchased a rise in Kew. This rise had two old tennis courts 
down  the  back  which  were  in  poor  conditi
on.  She  purchased  the  property  for  two 
reasons:
so that she and her rise could feed in the rise; and
so that she could delineationt three units on the tennis courts and dispose-of them at a 
profit.
In the present tax year the tennis club next door extended to buy t
he old tennis courts, 
but  singly  if  Peta  first  restored  them  to  good  situation.  Peta  decided  to  accept  the 
club’s extend instead of going forward after a while her delineation to delineationt and dispose-of units.
Peta  spent  $100,000  on  preparing  the  tennis  courts  for  sale.  This  involved 
a  great 
deal  of  operation.  Peta  had  to  resurface  the  tennis  courts  and  delineationt  new  fences  around 
them.  She  then  sold  the  tennis  courts  in  the  present  tax  year  to  the  tennis  club  for 
$600,000.
Ignoring high gains tax, argue whether the acknowledgment of $600,000 is
ordinary income 
below s


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