Question

In: Accounting

Susan is employed in the family business, which is a medium-sized accounting firm. Both her parents...

Susan is employed in the family business, which is a medium-sized accounting firm. Both her parents are partners in the five-partner firm that operates the business. Susan has been an employee for the last three years. During the current tax year, Susan received several amounts in addition to her normal wage which was equivalent to other employees with similar experience and similar qualifications.

One evening during discussions over the dinner table, Susan’s father asked her whether she had any good ideas on how to improve the client base of the firm. Susan had been thinking about this for some time and she prepared a two-page document outlining her ideas which her father presented to the other partners. One of Susan’s ideas was adopted and proved moderately successful in attracting new clients. At the end of the financial year, Susan was surprised to receive an envelope with a letter thanking her for her ideas and a cheque for $2,000.

Does Susan have to pay tax on the money she received?

Solutions

Expert Solution

PLEASE - - - - PLEAE KINDLY UP-VOTE. IT HELPS ME A LOT. THANK YOU IN ADVANCE.

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

susan is employed in the family business, which is a medium sized accounting firm. Both her...
susan is employed in the family business, which is a medium sized accounting firm. Both her parents are partners in the five partner firm.that operates the business. Susan has been an employee for the.last three years. During the current tax payer, Susan eeceived several amounts in addition to her normal wage which was equivalent to the other employees with similar experience and aimilar qualifications. One evening during discussions over the dinner table, Susan's father asked her whether she had any...
You own an accounting firm. Your firm assists medium sized businesses with their more complex accounting...
You own an accounting firm. Your firm assists medium sized businesses with their more complex accounting transactions (leases, pensions, stock options) and processes such as establishing internal controls and creating reporting policies. You are investigating a company to determine its acceptability as a new client. You learn that the accounting staff at this entity is “overworked”. What concerns, if any, would this raise? What about if you learn that this potential client has a high turnover rate of employees in...
You have an interview for a junior management accounting role with a medium sized IT firm...
You have an interview for a junior management accounting role with a medium sized IT firm which has plans to list on the ASX. The interviewer informs you of a debate within the firm about whether or not to produce ‘corporate responsibility’ reports. She asks you what your opinion on the issue is. How would you respond?
Rubber stuff is medium-sized business which manufactures rubber mats for cars and for households. There are...
Rubber stuff is medium-sized business which manufactures rubber mats for cars and for households. There are some 15 workers in the factory, including the office staff and a manager. The workers belong to various unions according to the type of work they do. The workers on the factory floor are employed under an enterprise agreement which their unions negotiated some 18 months previously. In the press there have been some reports of dangerous fumes that may be emitted from rubber...
Southwoods  is  a  medium-sized  accounting  firm  that  provides  services  in  the areas of audit, taxation and investment advice. Outline the value chai
Southwoods  is  a  medium-sized  accounting  firm  that  provides  services  in  the areas of audit, taxation and investment advice. Outline the value chain for Southwoods and apply the relevant classifications to the costs listed below. (One or more classification may be appropriate for each cost item.) Cost classifications: (a) Research and development. (b) Design. (c) Production/delivery. (d) Marketing. (e) Customer support. (f) Fixed costs. (g) Variable costs (identify cost driver). (h) Professional labour. (i) Overheads. Costs: 1 Salaries of staff who work directly on audit assignments. 2 Salary of the financial...
The managing director of SleekMode Enterprises, a medium sized firm, are the operators of a number...
The managing director of SleekMode Enterprises, a medium sized firm, are the operators of a number of theme parks in a number a major cities across the country. The theme parks include facilities such as children’s play grounds, cinema halls, roller-coaster rides, restaurants and boat rides, among other attractions. Yeovil Mootooma, the chief marketing officer, has the task of increasing visitor numbers at the company’s theme parks across the country. The company has experienced consistent declines of about 5% in...
Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is...
Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the master budget for the first 2 quarters of 2020. All that remains in this process is the cash budget. The following information has been collected from other portions of the master budget and elsewhere. Beginning cash balance $32,400 Required minimum cash balance 27,000 Payment of income taxes (2nd quarter) 4,320 Professional salaries:     1st quarter 151,200     2nd quarter 151,200 Interest from investments...
Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is...
Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the master budget for the first 2 quarters of 2020. All that remains in this process is the cash budget. The following information has been collected from other portions of the master budget and elsewhere. Beginning cash balance $30,600 Required minimum cash balance 25,500 Payment of income taxes (2nd quarter) 4,080 Professional salaries:     1st quarter 142,800     2nd quarter 142,800 Interest from investments...
Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is...
Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the master budget for the first 2 quarters of 2017. All that remains in this process is the cash budget. The following information has been collected from other portions of the master budget and elsewhere. Beginning cash balance $33,030 Required minimum cash balance 27,525 Payment of income taxes (2nd quarter) 4,404 Professional salaries:     1st quarter 154,140     2nd quarter 154,140 Interest from investments...
Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is...
Pletcher Dental Clinic is a medium-sized dental service specializing in family dental care. The clinic is currently preparing the master budget for the first 2 quarters of 2017. All that remains in this process is the cash budget. The following information has been collected from other portions of the master budget and elsewhere. Beginning cash balance $38,220 Required minimum cash balance 31,850 Payment of income taxes (2nd quarter) 5,096 Professional salaries:     1st quarter 178,360     2nd quarter 178,360 Interest from investments...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT