In respect of each benefit you are required to:

• specify the category and the applicable division of the Fringe Benefits Tax Assessment Act 1986 (FBTAA);
• provide section references of the FBTAA for each part of your calculation; and
• indicate whether the benefit is a Type 1 or Type 2 benefit and state the reason.

Reasons for any exclusions must also be provided.

Your working papers must be typed using Excel or Word. The FBT return may be handwritten. An Excel worksheet has been provided to help you to set out your assignment.

World’s Best Gifts Pty Ltd (WBG) is a company resident in Australia. Its business is the sale of unusual and original giftware. In addition to providing giftware to boutique gift stores in Perth it also has salespeople who drive to rural areas to sell its giftware to shops in country areas. Its turnover is above $10 million.

It provides the following to its staff in the FBT year ended 31^st March 2020.

Parking was provided on-site to 12 staff. There were three commercial parking stations within one kilometre. One charges $15 per day but by the end of the year had increased this to $18 per day, one charges $18 per day, and one charges $10 per day. Staff paid $5 per week towards their on-site parking.

Taxi fares for the head of the IT division. She had never learned to drive. WBG paid $10,000 in taxi fares during the year. 85% of the trips were to and from work, however, she used the remaining vouchers to travel privately after hours.

An end-of-financial year party was held at a 5-star hotel. All 50 staff attended and 40 of them brought a partner. The party cost $280 per head. The business used the actual method to calculate the entertainment FB.

Notes:

The company does not qualify as a SBE.

The company has paid GST where it is liable to do so and all amounts shown are GST-inclusive.

One of Vivienne’s major clients in a regional area renowned for its beautiful resort provides her with a weekend stay which included accommodation and food, airline tickets and tickets to a concert with an international act. The cost of this package was $8,500 and Vivienne and her daughter attended. This was offered to her as she had developed a rapport with her client and sourced interesting giftware to be sold in the resort. It was always very expensive and very exclusive giftware. The client was very appreciative of the special service provided by Vivienne. WBG was aware that Vivienne and her daughter would attend this function and that it was being provided free of charge.

REQUIRED:

Complete working papers showing how you have calculated the taxable value of each benefit provided. Include in your working papers references to the FBT legislation for each benefit provided and provide reasons and explanations for any items which you exclude from the calculations. Calculate the FBT payable by World’s Best Gifts Pty Ltd.

The following information relates to Dane City during its fiscal year ended December 31, 20X2:

1. On October 31, 20X2, to finance the construction of a city hall annex, Dane issued 8 percent, 9-year general obligation bonds at their face value of $617,000. Construction expenditures during the period equaled $365,300.
2. Dane reported $110,300 from hotel room taxes restricted for tourist promotion in a special revenue fund. The fund paid $82,000 for general promotions and $23,000 for a motor vehicle.
3. Dane transferred 20X2 general fund revenues of $105,500 to a debt service fund and used them to repay $97,000 of 9 percent, 14-year term bonds and to pay $8,500 of interest. The bonds were used to acquire a citizens’ center.
4. At December 31, 20X2, as a consequence of past services, city firefighters had accumulated entitlements for compensated absences of $83,000. General fund resources available at December 31, 20X2, are expected to be used to settle $18,000 of this amount, and $65,000 is expected to be paid out of future general fund resources.
5. At December 31, 20X2, Dane was responsible for $84,000 of outstanding general fund encumbrances, including the $8,900 for supplies in the following table.
6. Dane uses the purchases method to account for supplies. The following information relates to supplies:

Required:
For items 1 through 10, determine the amounts based solely on the preceding information.

1. What is the amount of 20X2 general fund transfers out?

general fund transfers out

2. How much should be reported in 20X2 as general fund liabilities from entitlements for compensated absences?

general fund liabilities

3. What is the 20X2 assigned amount of the general fund balance?

general fund balance

4. What is the 20X2 capital projects fund balance?

capital projects fund balance

5. What is the 20X2 fund balance on the special revenue fund for tourist promotion?

special revenue fund

6. What is the amount of 20X2 debt service fund expenditures?

debt service fund expenditures

7. What amount should be included in the governmentwide financial statements for the cost of long-term assets acquired in 20X2?

cost of long-term assets

8. What amount stemming from the 20X2 transactions and events decreased the long-term debt liabilities reported in the governmentwide financial statements?

amount of decrease

9. Using the purchases method, what is the amount of 20X2 supplies expenditures?

supplies expenditures

10. What was the total amount of 20X2 supplies encumbrances?

supplies encumbrances

The town of Malvern engages in the following transactions during its fiscal year ending September 30, 2021. All dollar amounts are in thousands. Prepare summary journal entries in its governmental funds. Base entries on generally accepted accounting principles now in effect.

(1)   At the beginning of the fiscal year 2021, the town levied property taxes of $180,000. It estimated that $6,000 will be uncollectible.

(2)   During fiscal year 2021, the town collected $150,000 prior to September 30, 2021.

(3)   The town collected $4,000 each month in October and November 2021, prior to preparing its 2021 financial statements. It expected to receive $4,000 each month for the next four months.

(4)   During the remainder of fiscal year 2022, the town collected $16,000 in tax relating to 2021, $140,000 related to 2022, and $10,000 applicable to 2023.

(5)   On November 20, 2021, it received $42,000 from the state for sales taxes collected on its behalf. The payment was for sales made in September that merchants were required to remit to the state by October 15.

(6)   In April, the town was awarded a state training grant of $500 for the period June 1, 2021, through May 31, 2022. In fiscal 2021, the town received the entire $500 but spent only $400.

(7)   The town requires each vendor who sells at its farmers' market to obtain an annual permit. The funds generated by the sale of these permits are used to maintain the market. The permits, which cover the period from June 1 through May 31, are not refundable. During fiscal year 2021, the town issued $66 worth in permits. It expects to collect an additional $12 within 60 days of the close of the fiscal year.

(8)   On May 1, 2021, a developer (in exchange for exemptions to zoning restrictions) donated several acres of land that the town intended to convert to a park. The land had cost the developer $100,000. At the time of the contribution, its fair market value was $280,000.

(9)   Several years earlier the town received a donation of a parcel of land, upon which it expected to build. During fiscal 2021, it opted to sell the land for $185. When acquired by the town, the land had a market value of $119.

At the beginning of the fiscal year 2021, The town of Marlvern acquired six police cars at a total cost of $200,000. The vehicles are expected to have a useful life of four years. Prepare the journal entries that the town would make in its governmental funds in the fiscal year based on the following scenarios:

(10)It paid for the cars in cash at the time of acquisition.

(11)It issued $200,000 in installment notes to the car dealer, agreeing to repay them in four annual payments of $63,095 at the end of each fiscal year (effective interest rate is 10%), starting in the year of acquisition.

Ohme Framing's cost formula for its supplies cost is $1,620 per month plus $13 per frame. For the month of April, the company planned for activity of 882 frames, but the actual level of activity was 878 frames. The actual supplies cost for the month was $13,500. The supplies cost in the flexible budget for April would be closest to:

Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output

Speedy Pete’s is a small start-up company that delivers high-end coffee drinks to large metropolitan office buildings via a cutting-edge motorized coffee cart to compete with other premium coffee shops. Data for the past 8 months were collected as follows:

Assume that this information was used to construct the following formula for monthly delivery cost.

Required:

Assume that 3,000 deliveries are budgeted for the following month of January. Use the total delivery cost formula for the following calculations:

1. Calculate total variable delivery cost for January.
$

2. Calculate total delivery cost for January.
$

Feedback

1. Total Variable Delivery Cost = Variable Rate × Number of Deliveries

2. Total Delivery Cost = Fixed Cost + (Variable Rate × Number of Deliveries)

Kurt Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.40 Direct labor $ 3.20 Variable manufacturing overhead $ 1.20 Fixed manufacturing overhead $ 14,400 Sales commissions $ 0.40 Variable administrative expense $ 0.45 Fixed selling and administrative expense $ 3,300 If the selling price is $20.20 per unit, the contribution margin per unit sold is closest to:

Multiple Choice

• $6.20

• $5.35

• $8.55

• $10.60