Question

Q1 A 4 year business loan was taken out commencing on 1 July 2017. The loan establishment fee was $1,600. The deduction of the borrowing expenses in the 2018 financial year should be ____

Select one:

a. $1,600

c. $400

d. nil

Q2 A 8 year business loan was taken out commencing on 1 July 2017. The loan establishment fee was $1,600. The deduction of the borrowing expenses in the 2018 financial year should be ____.

Select one:

a. nil

b. $1,600

c. $320

Q3 A 4 year business loan was taken out commencing on 1 January 2018. The loan establishment fee was $1,600. The deduction of the borrowing expenses in the 2018 financial year should be ____.

Select one:

b. nil

c. $200

d. $160

Q4 Wendy made a contribution to a political party which she supports. She carries on a consulting business as a sole trader. The income derived from Wendy's consulting business is her only source of income. She ____ claim the contribution as a deduction.

Select one:

a. may sometimes

b. must

d. cannot

Q5 Wendy made a contribution of $1,200 to a political party which she supports. She is an employee and does not carry on any business. She ____ claim the contribution as a deduction.

Select one:

a. can

b. cannot

c. must

d. is unable to

Answer 1

1) $400 as the fees is amortised over the period of loan

2) $320 as the fees is amortised over the period of loan

3) $200 as the fees is amortised over a period of loan and in current year it is prorated for 3 months

4) must as the contribution to political parties is allowed as deduction

5) cannot as deduction for contribution to political parties is not allowed for salaried employees.