Sample Guide Examination Questions - Tài liệu tham khảo | Đại học Hoa Sen

Sample Guide Examination Questions Question 1 (6 marks) The accountant for Zinifex
Pty Ltd is reviewing the company’s trial balance as at 30 June 2016.
The accountant is unsure whether the following amounts are considered ‘incurred’ for the purposes of
claiming a deduction under s. 8-1.
The accountant has noticed that the payroll tax expense account has a nil balance. On investigation, it
had been revealed that the company was not registered and had paid no payroll tax. An audit, which
occurred during July 2016, assessed the company’s payroll tax liability to be $14 000 for the year ended 30 June 2016.
Annual leave liability shows a balance of $90 000 and an opening balance of $60 000. In the profit and
loss the expense account for annual leave shows $100 000.
The company has created a provision for commissions due to its agents for the first time in 2016. The
agents are entitled to a commission for products sold on the company’s behalf. The agents are
notorious for taking their time in submitting claims, so the company does not know the amount of
commissions owing and has estimated the amount of unnotified commissions due at year-end. Required:
The accountant has asked for your help in deciding whether the above amounts will be incurred and therefore deductible. • Payroll tax
Although the company was not registered for payroll tax and the assessment was raised after year-end,
the liability was ascertainable and capable of calculation. Therefore, arrears of payroll tax are
deductible in the tax year to which the assessment giving rise to the liability relates. The $14 000 would
be deductible in the year ended 30 June 2016.
Section 25-5(2) denies a deduction for ‘tax’. Payroll tax is excluded from the definition of ‘tax’ s. 995- in
1 because it is not an income tax. (2 marks) • Annual leave
Section 26-10 stops provisions for accrued leave from being deductible. It is doubtful in any case
whether provisions would satisfy the test of being incurred (see Nilsen Developments Laboratories Pty
Ltd & Ors v. FC of T 81 ATC 4031; (1981) 144 CLR 616).
Only when the amounts for annual leave are paid will a deduction be allowed. Thus, in this case the net
deduction allowable as a deduction is $70 000 ($100 000 less the $30 000 movement in provision). (2 marks) • Commissions
The situation with commissions is that they are legally due but the exact amount is unknown. In the
RACV Insurance Pty Ltd and Australia and New Zealand Banking Group cases, the taxpayers were
allowed deductions for provisions on the basis of their reasonable estimation of the expenditure
involved and the fact that the event giving rise to the deduction had happened. On the basis that the
company can reasonably quantify its claim of liability, it will be deductible. (2 marks) Question 2 (6 marks)
A manufacturer owned a machine (Machine 1), which was acquired on 10 November 2013 at a cost of
$60 000 and which, at 30 June 2015, had a closing adjustable value for income tax purposes of $40
000. On 1 July 2015, Machine 1 was destroyed by fire and the taxpayer’s insurance proceeds (under a
replacement policy) were $78 000. The manufacturer immediately replaced Machine 1 with a new
model costing $80 000. This new machine (Machine 2) has an effective life of seven years.
Assuming that the manufacturer uses the machines wholly for a taxable purpose, is not a small
business entity and elects to claim depreciation by the diminishing value method, answer the following
questions, giving any alternatives that may affect the position: Required:
a) How is the taxpayer’s assessable income affected by the insurance recovery?
b) What will be the taxpayer’s depreciation deduction on Machine 2 for the year ended 30 June 2016?
(a) Disposal of Machine 1 on 1 July 2015 $
Termination value (insurance recovery) 78,000 Adjustable value 40,000 Balancing adjustment 38,000
The $38,000 excess will be assessable under s. 40-285. However, as there was an involuntary disposal
of the old machine, the manufacturer can choose whether to include the $38 000 balancing adjustment
in assessable income in the year of disposal, or to apply some or all of the balancing adjustment
amount as a reduction in the base value of the replacement asset (s. 40-365) . (3 marks)
(b) Depreciation allowed on Machine 2
The answer to (b) will depend upon the elections made or not made in (a).
If the taxpayer does not elect to take advantage of the balancing adjustment election, the depreciation
deduction on Machine 2 will be $22,920:
$80,000 * (366-0) / 365 * (200%/ 7 years) = $22,920
However, if the taxpayer elected to reduce the cost of the replacement asset by the balancing
adjustment, the depreciation deduction would be $12,033: $80,000 – $38,000 = $42,000
$42,000 * (366-0) / 365 * (200% / 7 years) = $12,033 (3 marks) Question 3 (8 marks )
On 18 March 1996, Rachel Thomas inherited 10 hectares of land upon the death of her mother. The
land had been acquired for farming purposes in March 1982 at a cost of $60 000. At the time of the
mother’s death, the land was estimated to be worth $300 000 and rented to a tenant, returning $20 000 per year.
In July 1998, Rachel acquired 8 hectares of land, which adjoined the property she inherited. The 8
hectares cost $250 000. The legal and other costs related to the purchase amounted to $15 000.
On 15 April 2016, both blocks were sold for a total of $750 000 and the sale costs were $15 000. Required:
Advise Rachel of the tax consequences of the above transactions.
Upon the disposal of the land, CGT event A1 would occur. However, in determining the capital gain,
consideration would need to be given to determining the cost base of the land that Rachel inherited from her mother. (1 marks)
As the first property was acquired upon the death of her mother, and it was a pre-CGT property Rachel
would be deemed to have acquired it at its market value on the date of her mother’s death (s. 128- 15(4)). (1 marks)
Since the property was not used as her main residence or disposed of by her within two years, the exemption provided under
does not apply. Therefore, the first element in the cost s. 118-195 base
would be its estimated market value of $300 000. (1 marks)
As both assets were acquired before and the CGT event occurred after 11.45 am on
21 September 1999, Rachel may determine her capital gains liability by either:
(i) using the CGT discount method and including 50 per cent of the capital gain as assessable income,
that is 50 per cent of $170 000 ($750 000 – $300 000 – $250 000 – $15 000 – $15 000) = $85 000; or (1 marks)
(ii) determining the capital gain using the indexed cost base method with indexation frozen
at the September 1999 quarter, as follows: $ $ Capital proceeds 750 000 Indexed cost base (a) Inherited land 300 000 × 1.038 311 400 68.7 / 66.2 (1 marks) (b) Acquired land
250 000 plus legal costs 15 000 $265 000 × 1.018 269 770 68.7 / 67.5