a. Basma and Badriya each have total income of £47,845 non which is savings or dividend income. Badriya makes a payment of £2,000 to a charity under the gift aid scheme. Calculate the Income Tax Payable by Basma and Badriya for the year 2018/19. b. Saif has the following income and outgoings for the tax year 2018/19. Trading Income £12,465 Employment Income £13,000 Premium Bond Winnings £2,000 She made the following payments during the tax year 2018/19. • Interest payments during the year totaling £2,000 on his mortgage for his principal private residence. • Interest payments of £2,000 on a loan to invest on a partnership in which he is a partner. Calculate the Income Tax Payable by Saif for the year 2018/19.
In: Accounting
Required: Prepare the journal entries necessary to record the above information on ABC company’s books during 2018.
In 2018, ABC company engaged in the following investment:
Jan1 Purchased $160,000 of 6% bonds for $168,300 (a 5% effective interest rate) as a non-trading investment. Interest is paid on May 1 and January 1 and the bonds mature on January 1, 2023.
Jan1 Purchased 25% of the outstanding ordinary shares of Super star for $210,000 cash. On that date, Super's book value and fair value were both $840,000. The equity method is deemed appropriate for this investment.
Nov1 The bonds are sold at 105 plus accrued interest.
Dec 31 Super’s net income reported on December 31, 2018, was $80,000. During 2018, Super also paid cash dividends in the amount of $24,000.
In: Accounting
Green Thumb Garden Supplies reported the following information
for 2017 and 2018.
2018 2017
Assets
Cash
$ 50,000 $ 45,000
Accounts
receivable
35,000 25,000
Inventory
25,000 20,000
Property, plant, and
equipment
240,000 210,000
Total
assets $350,000 $300,000
Liabilities and
Shareholders’ Equity
Current
liabilities
$ 65,000 $ 60,000
Non-current
liabilities
110,000 90,000
Shareholders’
equity—common
175,000 150,000
Total liabilities and
shareholders’
equity $350,000 $300,000
Income statement for
2018
Sales
$95,000
Cost of goods
sold
45,000
Gross
profit
50,000
Operating
expenses
15,000
Income before income
tax
35,000
Income tax
expense
5,000
Net
income $30,000
What is the inventory turnover ratio for 2018?
2.3 times
2.0 times
1.8 times
0.5 times
In: Accounting
On 1 July 2014, Atropos Company purchased a depreciable asset at a cost of $1.2 million. The asset had an estimated useful life of 12 years and was depreciated on a straight-line basis. The recoverable amounts of the asset were as follows:
2015 - 1000,000
2016 - 900 000
2017- 800,000
2018 - 850,000
indicators of impairment were identified on 30 June 2015, 2016 and 2017, while indicators of a reversal of impairment were found on 30 June 2018. The asset was sold on 1 July 2018 for $860 000. Required Assuming that the company adopts the cost model for accounting for non-current assets and complies with AASB 116 ‘Property, Plant and Equipment’ and AASB 136 ‘Impairment of Assets’, show the general journal entries for the asset from 1 July 2014 to 1 July 2018.
In: Accounting
|
$ |
$ |
|
|
Building |
318,000 |
|
|
Less: Accumulated depreciation |
145,200 |
172,800 |
|
Equipment |
720,000 |
|
|
Less: Accumulated depreciation |
288,000 |
432,000 |
|
Total non-current assets |
604,800 |
During 2019, the following selected transactions occurred:
May 1 Sold equipment that cost $720,000 for $420,000.
June 30 There was an indication that the building could be impaired due to flooding, Prince Ltd calculated the recoverable amount of the building. The net selling price was $155,000 and the value in use was estimated to be $147,000.
Prince Ltd uses straight-line depreciation for buildings and equipment. The building is estimated to have a 40-year useful life and no residual value. The equipment is estimated to have a 10-year useful life and no residual value.
Required
Explain the difference between impairment and depreciation [3 Marks]
In: Accounting
On January 1, 2018 WAG entered into a non-cancellable lease agreement with PE for the lease of specialized laboratory equipment designed to draw blood to perform health tests for their customers. The lease agreement requires WAG to make beginning of the year payments for the 5-year term of the lease. The fair value of the equipment at lease inception is $25,418,156. WAG guarantees to PE that the residual value of the equipment at the end of the term of the lease will be $2,500,000. However, given that the equipment is heavily used by WAG it has an expected residual value at the end of the lease of $2,250,000.
The useful life of the equipment is 10 years with a salvage value to PE of $2,500,000. Both PE and WAG use the straight-line method of depreciation (or amortization) for their equipment and right of use assets. The lease contract includes a written option that would give WAG the option to purchase the underlying equipment for a price of $3,500,000.
Collectability of lease payments is reasonably predictable.
PE's implicit rate of return of 8% is known to WAG and WAG's incremental borrowing rate is 10%.
1) What would be the amount to be recovered by the lessor (PE) through equal lease payments?
2) From the perspective of the lessee, which criteria for classifying a lease as a finance lease were met?
3) What would be the journal entry that WAG needs to post to their general ledger to recognize the lease inception and first payment on January 1, 2019?
4) Amortization expense recorded by WAG in each year would be calculated as:
In: Accounting
Fumaric acid is an organic compound composed of 41.39%C , 3.47% H, and the rest oxygen. If 0.145 mole of fumaric acid has a mass of 16.8 g, what are the empirical and molecular fomulas of fumaric acid? Empirical formula: Molecular formula:
In: Chemistry
An unknown compound contains only C , H , and O . Combustion of 6.50 g of this compound produced 15.9 g CO2 and 6.50 g H2O . What is the empirical formula of the unknown compound? Insert subscripts as needed.
empirical formula:[CHO]
In: Chemistry
You are the junior accountant at CBW Bank. You have been asked to assist with the 30 June 2020 tax work:
i) The Bank provided loans totaling $5,000,000 in mortgage loans, equally to 10 of its staff during the year. These loans were interest only repayments and were made at arm’s length, at an interest rate of 5.37%.
ii) Due to a staff restructuring at the bank, 3 of the staff who took mortgage loans were made redundant on 30 November 2019. Due to financial hardship on these 3 staff, the Bank waived the interest on the loans for a period of one year.
iii) The bank paid the mobile phone bills for these 10 staff during the current tax year. The monthly bill per staff member was $69.
iv) Within these staff was the bank manager. As part of the bank manager’s contract, she was provided with a BMW luxury motor vehicle for her work travel. The contract for the provision of the car was entered into on 1 January 2019.
The bank manager is permitted to take the car home at the end of the day and there is no restriction on her use of the car for non-work purposes.
The car was originally acquired by the bank on 1 January 2018. The cost of the car was $90,000.
Other details regarding the car are as follows:
Petrol and oil $6,000
Registration $2,000
Insurance $1,800
Repairs and Maintenance $1,000
Speeding fine $600
The manager is required to contribute $100 per month. The car traveled 50,000 km for the year FBT year. Of these, 30,000 km related to business travel.
Required:
1) Calculate FBT liability for the loans. Show all workings.
2) Calculate FBT liability for the mobile phone. Show all workings.
3) Calculate FBT liability for the car. Show all workings.
4) What is the total FBT liability the bank manager needs to remit to the ATO. Give a brief reason why you stated your answer.
In: Accounting
You are the junior accountant at CBW Bank. You have been asked to assist with the 30 June 2020 tax work: i) The Bank provided loans totaling $5,000,000 in mortgage loans, equally to 10 of its staff during the year. These loans were interest only repayments and were made at arm’s length, at an interest rate of 5.37%. ii) Due to a staff restructuring at the bank, 3 of the staff who took mortgage loans were made redundant on 30 November 2019. Due to financial hardship on these 3 staff, the Bank waived the interest on the loans for a period of one year. iii) The bank paid the mobile phone bills for these 10 staff during the current tax year. The monthly bill per staff member was $69. iv) Within these staff was the bank manager. As part of the bank manager’s contract, she was provided with a BMW luxury motor vehicle for her work travel. The contract for the provision of the car was entered into on 1 January 2019. The bank manager is permitted to take the car home at the end of the day and there is no restriction on her use of the car for non-work purposes. The car was originally acquired by the bank on 1 January 2018. The cost of the car was $90,000. Other details regarding the car are as follows: Petrol and oil $6,000 Registration $2,000 Insurance $1,800 Repairs and Maintenance $1,000 Speeding fine $600 The manager is required to contribute $100 per month. The car traveled 50,000 km for the year FBT year. Of these, 30,000 km related to business travel.
Required:
1) Calculate FBT liability for the loans. Show all workings.
2) Calculate FBT liability for the mobile phone. Show all workings.
3) Calculate FBT liability for the car. Show all workings.
4) What is the total FBT liability the bank manager needs to remit to the ATO. Give a brief reason why you stated your answer.
In: Accounting