Question

All Sports Ltd supplies a wide range of sporting goods including Rugby League Balls. All Sports Ltd derives Australian sourced income for the current tax year comprising net income from trading of $60,000, franked distribution from public companies amounting to $21,000, (carying an imputation credit of $9,000). unranked distributions from resident private companies amounting to $16,000 and rental income of $4,000.

Required: a) Calculate the net tax pavable by All Soorts Ltd for the year ended 30 June 2019. (6 marks)

b) What will be the effect, it any, on the company's franking accounts as a result of receiving the dividends?

Answer 1

This sum is solved considering Imputation Credit as Income of the shareholder and then the credit of the Income is given for tax purposes .

Note since All Sports Ltd is a company a tax rate of 30% is taken .

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