All amounts are in New Zealand dollars and GST - exclusive unless otherwise stated. Please answer the
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All amounts are in New Zealand dollars and GSTexclusive unless otherwise stated.
Please answer the question following NZ tax law.
Serenity Furniture & Dcor Limited SFD is a New Zealand tax resident company. SFD has one retail shop in Gisborne selling furniture and home dcor SFDs annual turnover for the income year ended March was $
The following information relates to SFDs trading stock for the income year ended March :
On April SFD had $ of stock on hand. During the year, SFD purchased $ of stock. As at March the cost of stock on hand was $
In April SFD took a large desk from its trading stock and started using it as a sales counter ie it became a fixed asset of the business The market value of the desk at the time was $ The desk was included in opening stock but excluded from the closing stock value outlined above. The Inland Revenueprescribed depreciation rate for the desk is diminishing value.
Required:
a Assuming SFD wishes to minimize its taxable income, explain how SFD should value its closing stock at March Provide one relevant legislative reference. marks
b Explain the income tax treatment of the desk in the income year ended March marks
marks
Related Book For
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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