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Australia Question 3: A doctor operates a medical practice. However, he also has a second business,...

Australia Question 3:

A doctor operates a medical practice. However, he also has a second business, whereby he also operates a charter fishing boat. The doctor is registered for GST for both businesses.

The following information relates to his two businesses for the quarter ended 30 June 2018.

Where applicable, amounts shown below are inclusive of GST.

$

Receipts:

Gross income from patient consultations 125,000

Gross income from charter boat business 44,000

Franked dividends 5,500

Income from managed fund 2,200

Gross proceeds from sale of dental equipment used in the business 1,100

Payments:

Purchase of new computer for doctor’s surgery 3,300

Wages and superannuation paid to nurse and receptionist 65,000

Depreciation expense on medical equipment 4,600

Rent, electricity & telephone expenses relating to medical surgery 22,000

Bank charges on business bank account 550

Fresh fruit and salad and vegetables for catering on the charter boat 2,750

Cold chicken and fresh bread for catering on the charter boat 660

Fuel and repairs and maintenance relating to charter boat 7,700

Management fee charged by financial planner for managed fund investment 3,300

Required:

What is the net GST payable to the ATO for the quarter ended 30 June 2018?

You can assume that the taxpayer holds valid tax invoices for all relevant payments.

Expert Solution

Particulars	AUD
Gross income from patient consultations	125000
Gross income from charter boat business	44000
Franked Dividend	5500
Franking Credit (5500*30/70)	2357
Income from managed fund less 50% CGT Discount	1100
Gross proceeds from sale of dental equipment used in the business	1100
Total Receipts	179057
Less:
Purchase of new computer for doctor’s surgery	3300
Wages and superannuation paid to nurse and receptionist	65000
Depreciation expense on medical equipment	4600
Rent, electricity & telephone expenses relating to medical surgery	22000
Bank charges on business bank account	550
Fresh fruit and salad and vegetables for catering on the charter boat	2750
Cold chicken and fresh bread for catering on the charter boat	660
Fuel and repairs and maintenance relating to charter boat	7700
Management fee charged by financial planner for managed fund investment	3300
Total Payment	109860
Net Income including GST	69197
NET GST payable (69197*10/110)	6290.64

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