PREPARE INCOME TAX RETURNS

FNSACCT502A/B
SOLUTIONS
MARKING GUIDE
2011 JUNE FINAL EXAM

266084600.doc

TAFE NSW

Page 1

Question1 12 marks
Part (a)
Luke
Salary
Interest
Net Investment Losses
Taxable income
Income Tax
Med Levy 1.5%*126100
Med Surcharge
1% * 126100 +6,300
HELP HRI =
126100+2600+6300 =
135000 x 8%
Less PAYG
Net tax Refundable

(b)
128,000
700
(2,600)
126,100
34,607.00
1,891.50

Libby
Business Income
Interest

Taxable Income
Income Tax
Med Levy
1.5%*29,800
1,324.00 Med Surcharge
1% * 29,800
10,800.00
Less: Offsets
(50,000.0 Mawto
0)
(1,377.5 LITO
0)
Net tax payable

29,100
700
29,800
3,570.00
447.00
298.00

(500.00)
(1,500.0
0)
2,315.0
0

Combined Income for surcharge purposes

126,100+6,300+2600+29,800=164,800
Family Threshold
154,000
Marking Guide
6 Marks each parts (a) & (b) -2 Error of Principal, -1 Other error
-3 if Medicare surcharge not considered.
Question 2
18 Marks
Assessable Income
Wages
Travel Allowance
Interest
Rental Income
Recovery rental bond board

Penalty
12,000
1,000
200
30,000
1,020

1
1
1
1
1
44,220

Less Deductions
Rates
Maintenance of Lawns
Construction Driveway capital works
2 %*3,400*3/12
Building capital works 120000 x 2.5%
x9/12
Repairs
DIV Dishwasher
2200/10*9/12*200%
Ceiling Fan <$300 imm ded
DIV Vertical Blinds
1800/12*200%*7/12
Loss B/F
Travel costs 2620 x 0.63
Self education costs
266084600.doc
TAFE NSW Page 2

1,040
820
21

1
1
2

2,250

3,200
330

1
2

250
175

1
2

4,000
1,651
2,196

2
2
Up to

1200+250+1230x0.63 (250350x0.63)

3
(15,933)
28,287

Taxable Income

266084600.doc

TAFE NSW

Page 3

Question 3
20 Marks
Sales 2,150,000+30000+13000-23000
Insurance Recovery
Contra
Balancing adjustment (2,200-1,800)
Stock variance
Stock own use

Penalty
2

2,170,0
00
9,000
1,500
400
1,000
2,000

1
1
2
2
2
2,183,900

Less Deductions
Purchases 1,300,000+15,000-10,000
Wages +PAYG withholding
Superannuation 22,000+27900
Advertising 2000x2
Loan-Interest
Donation Political limited to
Entertainment
Legal Fees-re Bad debts
Borrowing costs 3200/5
x10/12
Truck expenses
Mobile phone costs 588*80%
Website Costs
FBT
DIV Low value pool O/Bal 3,500*37.5%
DIV Cabinet
800*18.75%
DIV Computer
2,400/4*200%*5/12

14,000

470
3,000
1,736
1,313
150
667

1
1
1
1
2
2

1
2
1
1
1
1
1
2

(1,670,61
9)
513,281

Taxable Income

266084600.doc

1,305,0
00
270,000
49,900
4,000
14,000
1,500
2,000
2,350
533

TAFE NSW

Page 4

Question 4 10 marks - 1 per error amount and tax rate

AI
Amount
Tax Rate
Salary
32,500
MR
Franked dividend
750
MR
Franking credit
321
MR
Annual Leave
3,000
30%
Long service Leave
25,000
30%
Redundancy ETP 145,00063,722
15%
(8126+4064*18)
Superannuation up to cap
160,000
0%
Superannuation over to cap
110,000
15%
Taxable Income
395,293
Income Tax
Medicare Levy 395293-160,000*1.5%
Less: Offsets
Termination Rebate
MAWTO
Franking Credit

151,431.8
5
3,529.39
112,837.
90
500.00
321.00
(113,658.9
0)
(37,000.00
)
4,302.34

Less: PAYG
Net tax Payable
Termination Rebate
Income tax on taxable Income
Less tax on 32,500+750+321
Less Tax on 3,000+25,000*30%
Less:Tax on 63,722*15%
Less Tax on270,000160,000*15%
Termination rebate

151,431.85
( 4,135.65)
( 8,400.00)
( 9,558.30)
(16,500.00)
112,837.90

266084600.doc

TAFE NSW

Page 5

(38,593.95)

266084600.doc

TAFE NSW

Page 6

Question 5
7 marks
Annualised Bus km
(24000-200)/9x12x55%
DIV
57466 / 8 x 9/12 x2

17453 > 5000

-1

10775

-2 if
missing

Operating expenses

-1 per
error

Petrol & Oil

Services & repairs
Car washes
NRMA
Insurance
Registration
DIV
Total

5,100
4,300
130
220
1,400
900
10775
22825

Log Book
22825*55%

12554

-1

12% original cost

12%*57466*9/12

5172

-1

1/3 of actual exps

1/3*22825

7608

-1

Cents Per KM
5,000* 74c

3700

-1

Total Deductions
Motor Vehicle Expense
Etags Tolls
Total Deductions

266084600.doc

12554
+ 420 -1 if missing
12974

TAFE NSW

Page 7

Question 6
12 marks
other error
Calculation of Capital Gain

-2 per error of CGT principle, -1 per

Pua/other Collectibl
e

Hindmarsh sharesPre
sept1985
Morris shares
2,200- 2000* 123.4/77.6
Johnson shares 6000-8000
Mortimer shares 25,000-10000
Stamps 2000-1750
Painting 30,000-15,000
Motor vehicle
Leather lounge
Total
Net capital gain

No gain no
loss
(2000)
15000
(250)
15,000

Exempt
PUA<10,00
0
13000
14750
(13000+14750)*50%=13875

AI
Gross Salary
Net capital Gain

37,000
13,875
50,875

Less Deductions
Magazine subscriptions
Seminar

120
500
(620)
50,255

Taxable Income
Question 7
Tax offsets

9 marks

-1 per error

Invalid Relative
839-(2300-282)/4 = 839 504

335

Medical Expenses
Justin 150+2000+180+350 = 2680
Jenny 200+800+200+250 = 1450
Debbie 200+80+50
= 330
Cameron 280+70
= 350
Bob
60+80
= 140
Frank
400+600
= 1,000
Medical Rebate
= (59502000)*20%
Education tax offset 2000x50% limited to
LITO
Total tax offsets

266084600.doc

TAFE NSW

Page 8

Maximu
m
Penalty
-2

790

-5

794
1500
3419

-2
-1

Question 8

8 marks

Motor
vehicle
Rare coin
CBS shares
Antique Furn
GFC shares

Exempt

Rental
property
Jewellery
Loss B/F

15800

-1 per error
Collectible

25,000

25,000

(18200)

(18,200
)

7500

7500

(1200)

(1200)

8200
(5,500)

(5,500)
1,300

(17,1001300)*50%
=7900+1300
Net capital

Collectibl
e

14,500
(14,5006,300)50%
+6300
=10,400

6300

9,200+10400 =19,600

AI
NCG
Super Income Stream
Taxable income

19,600
47,000
66,600

Tax on TI (66600-37000)x30%+4650
Add: MCL 66600x1.5%
Less: Offsets
Super IS 47000x15%
LITO 1500-(66600-3000)x4%

13,530
999
7,050
36
(7,086)
7,443

Net tax Payable

Question 9
4 Marks
Directors Fees
Interest
Rent Income
Taxable Income
Income Tax
LITO - Limited
Tax Payable/refundable

7,500
1,000
6,000
14,500
1275
1275
0

-2 if ;
Capital loss included
Medicare Levy Charged
LITO not Limited
Other Errors -1
b) No SATO as he is under pension age of 65 years old.
266084600.doc

TAFE NSW

Page 9

1 mark