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Assessment Task 1

Assessment Instructions

This is an individual assessment. You are required to answer a series of questions in writing with the most suitable answer.

You must answer all of the questions below, and include examples where appropriate. Please ensure that you have answered each question with an appropriate level of detail. If you need help understanding any questions, ask your assessor to explain.

To be deemed competent you will need to successfully demonstrate the following:

You must complete and successfully answer all questions.

Question 1

Gary is starting an advertising business and expects the business to have a GST turnover of $450,000 annually. Gary wants to employ three staff members Peter, David and Amy. Peter will have private use of a company vehicle that has a FBT value of $8,000 and Amy will have private accommodation provided which has a FBT value of $20,000. What responsibilities does Gary have?

Question 2

Why did the government introduce the Superannuation Guarantee charge? What is the current rate and how is it worked out?

Question 3

a. What are the key features of the Tax Agent Services Act 2009?
b. What is the process to register as a BAS agent using the standard application?
c. What criteria must be met?

Question 4
Sam's interior design business provides you with the following current information. What is Sam's GST turnover? What are the reporting requirements for Sam?

Sales(net)	$250,000
GST on Sales	25,000
Rent received from commercial property(net)	15,000
GST on Rent from commercial property	1,500
Wages	80,000
Purchases	100,000
GST on Purchases	10,000

Question 5

World mining Manufacturing Limited produces heavy machinery for mining companies. With the imposition of the Federal Government's Carbon Tax, World mining expects manufacturing costs to increase but due to competition from overseas manufacturers it must absorb the cost of the tax, reducing profit margins and the amount of income tax it pays as a percentage of sales.
World mining has elected to use Option 2 for paying PAYG instalments, and has provided the following information for the quarter ending 30 September 2012:

Quarterly PAYG Instalment Income	$4,850,000
Estimated Annual PAYG Instalment Income	22,120,000
Estimated Annual PAYG Tax	663,600
Current Instalment Rate	5%

World mining paid salary and wages of $685,000 from which $205,000 was withheld and received an invoice for $5,400 with no ABN. World mining also has a pre-printed FBT instalment amount of
$12,300 on its activity statement and does not need to vary this amount.

You are required to complete the Instalment Activity Statement for World mining Manufacturing Limited (Show all working).

Question 6

1. Lee Motors sells a luxury car (which is not a fuel-efficient car) to Bruce for an "all-up-price" of $95,019, including GST and LCT. This price does not include stamp duty, registration or compulsory third part insurance. Calculate the LCT payable.

2. Tom conducts business growing bananas in Queensland and is registered for GST. For the 2016 income year, his total fuel use in operating his agricultural machinery was 8,500 litres of petrol and diesel (fuel acquired from 1 Jul 2015). Calculate his FTC entitlement.

3. Alco is a wholesaler of beer, wines and spirits. In the December quarter 2015 he derived
$350,000 total sales (GST inclusive), of which $170,500 was from sale of wine. What amount of WET is payable? (Show all working)

Question 7
How can you update your knowledge of professional and legislative requirements relating to activity statements?

Question 8
What action can the ATO take if a taxpayer fails to correctly report or pay by the due dates?

Question 9
What does PAYG tax withheld involve?

Question 10
How does the Electronic Commerce Interface (ECI) assist a taxpayer to comply with reporting requirements? Discuss in 50-80 words.

Question 11
What is a recipient created tax invoice (RCTI) and why are they necessary? Discuss in 80-100 words.

Question 12
One of the principles for the Code of Professional Conduct for agents, states:

'You must take reasonable care in ascertaining a client's state of affairs, to the extent that ascertaining the state of those affairs is relevant to a statement you are making or an activity you are undertaking on behalf of the client.'

What does this mean to you in terms of the manner in which you need to act, in explaining the impact of taxation on the individual and who is likely to be held responsible if an agent wilfully included false information, of which the client had no knowledge, in a tax return?

Prepare a report (2 pages) discussing your response.

Assessment Task 2

Assessment Instructions

This is an individual assessment. Using the scenario information supplied, the candidate will complete the BAS worksheet and the BAS Summary report for the tax period.

Procedure

1.    Read the Floral Design House scenario provided in Appendix.

2.    Using the information in the scenario, complete all questions.

To be deemed competent you will need to successfully demonstrate the following:

• You must complete and successfully answer all questions.

Question 1

Examine the chart of accounts in the Floral Design House and select four expense accounts and two revenue accounts that would be classified as 'Taxable Supplies'.

Expense or input accounts
1.
2.
3.
4.
Revenue or output accounts
5.
6.

Question 2

The following is a list of some acquisitions that need to be placed in accounts using the chart of accounts supplied for the Floral Design House. Place a tax code and account name next to each purchase transaction.

Transaction	Account	Tax code	Rate
Purchased special packing machine for export flowers
Purchased a photocopier for office
Recorded purchase of milk for staff
Recorded flower supplier invoice with no ABN
Recorded flower supplier invoice with ABN and GST status
Recorded interest paid to bank
Recorded bank fees from bank statement
Recorded payment of council rates

Question 3

The following is a list of GST-inclusive revenue received for the quarter by The Floral Design House. Calculate the instalment income.

Account	$
Sales and supplies	55 000
Export supplies	4 000
Residential rent received	3 300
Commercial rent received	8 800
Interest received	110
Sale of asset	440
Totals outputs	71 650

Question 4

Using the forward estimates exclusive of GST contained in the profit and loss budget of The Floral Design House, calculate the varied PAYG instalment rate that might apply. Their average tax rate is 28%.

Instalment income
Allowable deductions
Taxable income
Tax rate
Tax on income
Instalment rate

Question 5

The Floral Design House information for the second quarter of the tax year is given in Appendix.

Download the form below and complete the GST Calculation Worksheet for the Floral Design House Quarter 2.

Question 6

In Question 5 you used the BAS worksheet to complete the quarterly BAS for The Floral Design House. Now you are to complete the BAS Summary report using Option 2 for PAYG income tax instalment.

1. The FBT instalment has been notified as $2400. The firm requires this to be varied to an annual FBT payable of $12 000. The change is due to more benefits given to employees.

2. The PAYG rate advised by the ATO as 5.94% is to be varied to 4.69%. Reason code 21.

3. Calculate the PAYG instalment income for the quarter.

4. You are required to download the form and complete the quarterly BAS for The Floral Design House.

Additional information: The firm used 150 litres of petrol in business operations (Electricity generators).

5. Using a general journal format, explain how the payment transaction would be recorded in the accounting system.

Question 7

You are a BAS service provider. On inspection of Floral Design House records you have found the following unrelated mistakes or discrepancies. Indicate whether each mistake or discrepancy requires:

a) Lodgement of a revised Activity Statement due to error, or

b) An increasing adjustment, or

c) A decreasing adjustment.

Mistake or discrepancy	Error / Increasing Adj / Decreasing Adj
A purchase of $440 including GST from the last quarterly BAS has been cancelled.
Purchases of trading stock totalling $9,900 including GST were not reported on a BAS two years ago.
A sale of $12,100 reported in a prior BAS has become taxable.
Sales of $7,450 of GST-free items were not reported on a BAS last year.
A sale of $1,100 including GST reported in a prior BAS has been cancelled.

Assessment Task 3

Assessment Instructions

This is an individual assessment. You are required to complete the following tasks using MYOB AccountRight v19. If you need help understanding any questions, ask your assessor to explain.

Procedure
Berry Treats, a berry farm that also operates a café selling lunches and berry treats. Berries produced on the farm are used in the café and also sent to market. There is an old farm house on this property which is let as a residence.

You are required to enter the following transactions into the data file.
1. On 2 September, the takings of the Berry Café were $1,430 with GST and $1,350 in GST-free sales. Enter this transaction into Receive Money.
2. On 2 September, $1,000 of berry conserves were sold for export through Hammil Brothers International.
3. On 10 September, Deidre Tenant pays monthly rent of $1,000 for the farm house.
4. On 12 September, the business sent punnets of strawberries to the fresh fruit markets. A recipient-created tax invoice was received:

Recipient: ABC Produce Markets	Recipient-Created Tax Invoice
16 Harris way Granton NSW 2555
ABN: 1478569321
Supplier:	12 September 2015
Berry Treats
111 Ford St,
Granton NSW 2555
ABN: 65 221 876 937
Description	Amount
Strawberries 400 punnets	800.00
Less Farmers Levy - no GST	-8.00
Less Agents Fees - including GST	-22.00
Net Payment to Berry Treats - cheque enclosed	770.00
GST included in sale	-2.00
The supplier is liable for any GST payable on the above sale

5. On 13 September, the business paid its monthly account for fuel ($324.90 including GST) to Granton Garage (Cheque no. 486). This includes 100 litres of diesel for the farm ($150 including GST) for which the business will claim Fuel Tax Credits.

6. On 13 September, the business paid a rates instalment of $250 to Granton Council.

7. On 13 September, the business purchased stationery ($44 including GST), tea and coffee for staff ($6.20 GST-free) and shampoo for the family ($6.95) from the local supermarket. Cheque no. 488 covered all expenses.

8. On 14 September, the insurance on the café was paid $330 (including GST) for the premium and $20 stamp duty.

9. An invoice is received on 15 September for $55 GST on equipment hire. This invoice follows a previous invoice where the GST was mistakenly not added to the total owing. It was recorded last month as a debit of $550 to account 6-1600 Equipment Hire, using the N-T tax code.

10. On 16 September, the business took a client to dinner at field Restaurant ($132 including GST).

11. On 16 September, the business paid Telco Company for the telephone account: $562 including GST of $42.21.

12. Jim Hudson is a retired plumber. He has an ABN and did not register for the GST. His invoice was paid on 18 September for $140. He can be paid in full as the business has been provided with his ABN.

13. Frank Hopper is in business but has not supplied an ABN. On 18 September, he sent an invoice for $400 for fencing around the berry farm. After several requests for him to supply his ABN the business has decided to withhold tax.

14. The business has an agreement with its contractor Jim Roper to withhold 20% of his invoice as Voluntary Withholding Tax. On 20 September, Roper Farm Contracting charged $100 for maintenance work.

15. On 20 September the business purchased a used hoe from Haslet Equipment Hire at a cost of $220 including GST.

16. On 20 September the business purchased a new Jeep with loan.

Granton Motors ABN 54 785 888 484	Tax invoice 45896
To: Berry Treats ABN: 65 221 876 937 111 Ford St, Granton NSW 2555	Date: 20/9/2015
Details	$
Total cost of Jeep	61,133.00
Stamp Duty	760.00
Purchase Price of Jeep (incl GST)	61,893.00
Registration	344.00
CTP Insurance (incl GST)	440.00
Stamp Duty on CTP	32.00
Total amount	62.709.00
Less Trade-in (incl GST)	12,100
Total Amount payable	50,609.00

Vehicle Finance Co.	20/9/2015
Details of Finance
Payable to Granton Motors	$50,609.00
+Establishment Fee	312.00
+Registration Filing Fee	18.00
+Stamp Duty	210.20
	51,149.20
+Term Charges on the loan	8,367.00

Total Loan Amount	59,516.20
Repayment Details
Residual value after 3 years	15,000.00
36 monthly repayments of	1,262.50
1st payment due 26 September 2015
Interest in first payment per schedule	189.18

17. On 20 September the business sold a water pump to Frank Hopper for $350 cash including GST.

18. On 22 September the business replaced a broken door handle in the residential rental property. The replacement handle was purchased from Granton Hardware for $44 including GST.

19. On 26 September the business paid the first monthly loan repayment.

20. Berry Treats qualifies to claim Fuel Tax Credits on its farm diesel. The business's credit is 38.9 cents per litre of diesel.

21. The accountant of Berry Treats has determined that 20% of the telephone expenses of the business are private. At the end of each month, the business accounts for the private use.

22. On 30 September, Berry Treats purchased protective clothing for the farm on eBay ($120 - GST does not apply). The business Visa Card was used for this purchase.

23. Print the following reports for the period 1 September 2015 to 30 September 2015:
a. Payroll Activity [Summary]
b. GST[Summary-Accrual]

24. Complete activity statement for 1st quarter (July-September) 2015, using the following information:
a. GST on a monthly accrual basis - option 1
b. PAYG Withholding Tax monthly
c. PAYG instalments quarterly - option 2, Instalment rate is 12.3%
d. Using the worksheet method
e. GST accounting method: Accrual
f. Fuel Tax Credits are claimed.

25. Print and submit the activity statement, GST worksheet and BAS payment/Refund Entry to your assessor.

To be deemed competent you will need to successfully demonstrate the following:
• You must submit:
- Business Activity Statement
- GST worksheet
- BAS payment/Refund Entry

Attachment:- Berry Treats_Student.rar