1. Alex is an Australian resident for tax purposes. She currently works as a financial advisor in Melbourne. Her total salary for the income year ended 30 June 2020 is $120,000, from which her employer withheld Pay As You Go (PAYG) income tax instalments totalling $34,217.00.

Alex also has a share portfolio which has generated franked dividends of $7,000 and franking credits of $3,000. Alex took out a loan to purchase the shares and she incurred interest expenses of $5,000.

What is Alexs assessable income?

Select one:

$125,000

$122,000

$127,000

$130,000

2.

Adam opened a new business. During the year, there was sales income of $50,000 and purchases of $15,000. Trading stock valued at $500 was destroyed due to fire damage. The closing balance of stock at the end of the current income year was $5,000 before any reduction due to stock damage.

What is the taxable income from trading for the current income year?

Select one:

$50,000

$39,500

$35,000

$40,000

3.

Jim was born in Australia and resided in Australia all his life. For a period of five weeks during the year ended 30 June 2020 he was present in Malaysia on business for his employers. Jim stayed in a hotel in Kuala Lumpur during his stay. His wife and children remained in Australia where he maintained the family home.

For the purposes of Assessing Jims Australian tax obligations, Jim is a resident of Malaysia during the period of five weeks he was in Malaysia.

Select one:

True

False

4.

ABC Ltd is a container shipping company that is incorporated in Singapore. The company has three directors, all resident in Singapore. An Australian resident holds the majority of shares in ABC Ltd. The company prepares shipping contracts for freight between Australia, New Zealand and China. These contracts are all made by the Australian shareholder.

The Australian shareholder has the power to remove any or all of the three directors. In fact, the three directors have little or no knowledge of the business of the company.

All high-level decisions are made by the Australian shareholder and any resolution by the company has no effect unless it has his approval.

Is ABC Ltd a resident of Australia for tax purposes?

Select one:

Yes

No

5.

Francesca is an Australian resident. She receives a $700 fully franked dividend from Rio Tinto. She decides to put it in a Dividend Reinvestment Plan (DRP), rather than receiving the cash amount. Assume the company tax rate for Rio Tinto is 30%.

How much will Francesca include in her assessable income in relation to the dividend received?

Select one:

$700

$210

Nothing as she has not received the cash

$1,000