Assignment Task
Case Study
- You are currently employed as a Tax Agent for a local Accounting Firm
- Your clients include individuals (salary & wage earners and sole traders) as well as companies, trusts and partnerships.
- The ATO website should be used to verify current tax legislation and to seek advice and guidance. All client communications should be via email.
- Client details required to complete the Individual Tax Return are recorded on a new client details form.
Task
1. Makeit Pty Ltd is a local manufacturer. The company wishes to use all available small business concessions to minimise taxable income. Makeit Pty Ltd has prepared the following Profit & Loss Statement for the 2023 financial year:
| Gross Sales | Â | $ |
| Less Cost of Goods Sold | 33,000 | 1,900,000 |
| Opening Stock | 750,000 | Â |
| Purchases and Manufacturing Costs | 783,000 | Â |
| Closing Stock | -300,000 | Â |
| Gross Profit | Â | 483,000 |
| Add Other Income | Â | 1,417,000 |
| Foreign Income: Rent Italy (Net) | 11,500 | 13,500 |
| Interest Income | 2,000 |
1,430,500 |
Â
| EXPENSES | 650,000 |
| Gross Wages | 92,000 |
| Superannuation | 3,500 |
| Interest on Loan to purchase rental property in Italy Provisions for | 30,000 |
| Customer Warranty Claims – Note 2 | 31,000 |
| Truck Expenses | 60,000 |
| Accounting Depreciation – Note 3 | 9,500 |
| Share of Loss from Partnership with Al Insulation Pty Ltd | 24,000 |
| Tax Related Expenditure – Note 4 | 400,000 |
| Other Deductible Expenses | 1,300,000 |
| NET PROFIT BEFORE INCOME TAX | 130,500 |