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QUESTION TWO Salvador Ryan is an accountant and the Director of his accounting practice, Darwin Taxation Services Pty Ltd. ThNotes ()Profit on sale of office equipment The office equipment was purchased on 1 July 2015 for S10,000. Salvador estimated

QUESTION TWO Salvador Ryan is an accountant and the Director of his accounting practice, Darwin Taxation Services Pty Ltd. The following figures do not include GST. The company receipts ard payments for the year ended 30 June 2017 are as follows: Receipts 600,000 25,000 17,000 Professional accounting fees Sales of Do-It-Yourself Superannuation guides Dividend received from an Australian company franked to 50 % Interest on Bank Deposits Rental income from an investment property Profit on sale of office equipment (note 1) Dividend from shares in IBM (USA) (3) 5,000 10,000 2,000 850 Раyments s Office rent Cast of Do-It-Yourself Superannuation guides (note 2) Salary paid to employee secretary Train fare for travel to and from work 14,000 0,000 38,000 1,000 1,000 Legal fees for preparing a new lease of the office Rates paid on abovementioned investment property Interest paid on loan to acquire the investment property Cast of painting the investment property immediately after purchasing the property 2,000 15,000 5,000 1,000 Cast of replacing raof tiles on the investment property after the roof was damaged in a severe storm in February 2017 Cast of extending the bathroom in the investment property Cost of a new BMw for Salvador to use 100 % for business purposes 15,000 136,000
Notes ()Profit on sale of office equipment The office equipment was purchased on 1 July 2015 for S10,000. Salvador estimated its effective life for taxation purposes at the time of purchase at 10 years. He uses the prime cost method Sale proceeds sale date 30 June 2017 s5,000 Net book value based on accounting depreciation Profit 3.000 2,000 The Opening stock value for tax purposes was $19,000 (2) The FIFO Method however produces the following results for the Do-It-Yourself Superannuation guides at the end of the year S Cost Price 12,000 9,000 14,000 Replacement Price Market Selling Value (3) Withholding tax of $150 was paid in the US (4) The company has a carry forward past year tax loss of S42,000. The company has made PAYG Instalments of $150,000 during the year (5) REQUIRED Calculate Company's tax payable for the year ended 30 June 2017 (20 marks)
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SOLUTION:-

INCOME STATEMENT PAYMENT RECEIPTS AMOUNT AMQUNT $10,000 Professional accounting fees $14,000 Sales of guides $38,000 Dividend

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