FNSTPB401 Complete Business Activity and Instalment Activity Statements (MAS001) (FNSBKG404)
The following questions are based on the material in the textbook “Carry Out Business Activity & Instalment Activity Statement Tasks” by Phillip Charles & Sonia Deaner.
Activity instructions to candidates
• This is an open book assessment activity.
• You may be required to refer to your learning materials or other sources to complete this assessment.
• You may use a financial calculator or computer application to help calculate values
• You are required to read this assessment and answer all questions that follow.
• Please type your answers in the spaces provided.
• Please ensure you have read the “Instructions’ and “Important assessment information” at the front of this assessment
• Time allowed for pre-reading only (not for attempting of assessment activities) of the assessment instructions: 15 minutes
• Time allowed for completion of this assessment activity: 2-3 hours (excludes the pre-reading time).
The following questions are based on the material in Chapter 1: The Business Tax System
Q1: What is a BAS Service Provider? Explain.
(Note: this question is not asking about ‘BAS Services’)
The following questions are based on the material in Chapter 2: PAYG & IAS
Q2: Match the following terms with their respective definitions:
Possible definitions:
a. An arrangement where a separate contract is entered into to perform the original contract.
b. The process by which amounts are deducted from payments made to others and remitted to the ATO. This is done using BAS and IAS.
c. Payments made using a Business Activity Statement or Instalment Activity Statement (if not registered) including tax on business and investment income.
d. The PAYG form that states the total of the withholding payments and the amounts withheld.
e. A written agreement between a business and a worker to bring work payments into the PAYG withholding system.
f. Amounts that include sales, fees, interest income, rental income and dividends.
g. The amount will usually be based on previous year’s tax on business and investment income.
h. A penalty for underpaying instalments.
Terminology Definition
1. General Interest Charge
2. Instalment Income
3. Notional Tax
4. PAYG Instalments
5. PAYG Withholding
6. Payment Summary
7. Subcontract
8. Voluntary Agreement
The following questions are based on the material in Chapter 3: The Good & Services Tax
Q3:
Foxwedge Pty Ltd operates a small business. Foxwedge Pty Ltd accounts for and reports GST on an accrual basis quarterly. During the June quarter the following transactions occurred.
Required:
Complete the GST Calculation Worksheet for Foxwedge’s June quarter BAS.
All amounts include GST where applicable.
Receipts ($)
Sale of goods 200,900
Export sales 11,450
GST-free sales 5,000
Commercial rent received 12,900
Sale of printing equipment 19,500
Bank interest received 2,309
Dividends received 236
Bank loan received 300,000
Payments ($)
Salaries and wages 57,600
Superannuation 5,340
Rent of business premises 14,000
General business expenses 32,215
Purchase of fax machine 4,880
Printing supplies 42,420
Interest paid 100
Telephone 5,120
Drawings 150,000
Bank charges 560
Insurance 2,590
GST Calculation Worksheet for Foxwedge Pty Ltd, June quarter BAS:
GST amounts you owe the Tax Office from sales
G1 Total sales (including and GST) G1 $
G2 Export sales G2 $
G3 Other GST-free sales G3 $
G4 Input taxed sales G4 $
G5 G2 + G3 + G4 G5 $
G6 Total sales subject to GST G6 $
(G1 minus G5)
G7 Adjustments (if applicable) G7 $
G8 Total sales subject to GST after adjustments G8 $
(G6 + G7)
G9 GST on sales (G8 divided by eleven) G9 $
GST amounts the Tax Office owes you from purchases
G10 Capital purchases G10 $
(including and GST)
G11 Non-capital purchases G11 $
(including any GST)
G12 G10 + G11 G12 $
G13 Purchases for making input taxed sales G13 $
G14 Purchases without GST in the price G14 $
G15 Estimated purchases for private use G15 $
or not income tax deductible
G16 G13 + G14 + G15 G16 $
G17 Total purchases subject to GST G17 $
(G12 minus G16)
G18 Adjustments (if applicable) G18 $
G19 Total purchases subject to GST after G19 $
adjustments (G17 + G18)
G20 GST on purchases (G19 divided by eleven) G20 $
The following questions are based on the material in Chapter 4: Other Reporting Requirements
Q 4(a):
Carolyn’s Cars wishes to sell a car worth $69,300 including GST, but before Luxury Car Tax (LCT).
Calculate the amount of LCT using the 2017-18 threshold amount and determine the total amount Carolyn’s should charge for the car (show your workings).
Tip: If you cannot find the LCT threshold for this period in your textbook, visit www.ato.gov.au and search for ‘LCT threshold’.
1. Amount of LCT:
2. Total amount to be charged for car:
Q 4(b):
Solitude Springs is a resort in a remote part of North West Australia and must generate its own electricity using a generator. In December 2017 quarter it purchased and used 5,934 litres of petrol for electricity generation.
Required:
Calculate Solitude Spring’s Fuel Tax Credit entitlement (show your workings).
Tip: If you cannot find the rate for this period in your textbook, visit www.ato.gov.au and search for ‘FTC rates’.
Q 4(c):
Wonderful Wines is a winery in the Clare Valley and operates a cellar door selling wine direct to the public. In the December quarter it made sales of $97,235 including GST and Wine Equalisation Tax (WET). Wonderful Wines uses the half retail price method for calculating its WET liability.
Required:
Calculate the WET payable by Wonderful Wines on the December BAS (show your workings).
Q 4(d):
Cherry Cosmetics is a cosmetic company and has provided the following fringe benefits to its employees during the year ended 31 March 2018:
• Entertainment food and drinks $13,200 (including GST)
• A statutory interest amount of $10,000 on free loans provided to employees.
Required:
i. Identify the benefits as Type 1 or Type 2 and
ii. Calculate Cherry’s FBT liability for the 2018 FBT year (show your workings).
Tip: If you cannot find the rate and gross-up factors for this FBT year in your textbook, visit www.ato.gov.au and search for ‘FBT rate’
i. Entertainment food & drinks – TYPE:
i. Statutory interest amount – TYPE:
ii. FBT liability calculations:
The following questions are based on the material in Chapter 5: completing the BAS
Q 5: Sparky’s Electrical Wholesale is registered for GST and reports on a quarterly basis.
The company elects to use Option 1 for GST, Option 2 for the PAYG tax instalment and also need to pay an FBT instalment amount.
Sparky’s has provided the following information relating to the December quarter BAS.
G9 GST on sales $32,432
G20 GST on purchases $21,188
FBT instalment $10,000
PAYG tax withheld $14,200
PAYG instalment income $427,438
Commissioner’s instalment tax rate 5.90%
Required:
Complete the ‘Summary’ and ‘Payment or Refund’ sections for the December quarter BAS.
Summary
If you are using GST Option 3 leave 1B, 1C, 1D, 1E, 1F blank
Amounts you owe the Tax Office
GST on sales or GST instalment 1A $
Wine Equalisation Tax 1C $
Luxury Car Tax 1E $
PAYG tax withheld 4 $
PAYG income tax instalment 5A $
FBT instalment 6A $
Deferred company/fund instalment 7 $
1A + 1C + 1E + 4 + 5A + 6A + 7 8A $
Amounts the Tax Office owes you
GST on purchases 1B $
WET refundable 1D$
LCT refundable 1F $
Credit from PAYG income tax instalment variation 5B $
Credit from FBT instalment variation 6B $
1B + 1D + 1F = 5B + 6B 8B $
Payment or refund?
Is 8A more than 8B? (indicate with X)
Yes, then write the result of 8A minus 8B at 9. This is the amount payable to the Tax Office.
No, then write the result of 8B minus 8A at 9. This is the amount refundable to you (or offset against any other tax debt you have).
Your payment or refund amount
9 $
The following questions are based on the material in Chapter 6: Advanced BAS Topics
Q 6: What are the two methods available for accounting for GST? Explain each method.
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