1. Anna runs a lighting retail store and accounts for tax on an accruals basis. She has provided the following information: Trade debtors as at 30 June 2019: $36,000 Cash receipts during the year ended 30 June 2020: $390,000 Trade debtors as at 30 June 2020: $24,000 What is Annas assessable income from trading for the year ended 30 June 2020?

a. $378,000 b. $402,000 c. $426,000 d. $414,000 e. $390,000

2. Erin, a resident taxpayer, has a taxable income of $53,000 for the year ended 30 June 2020, with PAYG tax of $12,000 deducted by her employer. She has no dependants and is not entitled to any tax offsets/rebates. What will be Erins net tax payable or refundable for the year ended 30 June 2020? (include Medicare levy where appropriate but ignore any offsets):

a. $2,234.50 payable

b. $2,168.00 refund

c. $13,150.00 refund

d. $2,980.50 refund

e. $1,834.50 refund

3. In relation to the definition of trading stock for income tax purposes, which of the following statements is least correct?

a. Trading stock can cease being trading stock if it commences to be held for a purpose other than manufacture, sale or exchange in the course of a business.

b. Trading stock can commence being trading stock if it commences to be held for the purpose of manufacture, sale or exchange in the course of a business.

c. Trading stock can be purchased by a taxpayer carrying on a business.

d. Trading stock can be manufactured by a taxpayer carrying on a business.

e. Trading stock cannot include an item acquired as a gift by a taxpayer carrying on a business.

4. Which of the following items would not constitute trading stock on hand?

a. Computer spare parts of a computer supplier.

b. Trout in a trout farm breeding pond which will be caught and sold.

c. Goods held for sale on consignment by an agent.

d. Demonstrator motor vehicles owned by a car dealership which will be sold to the public once they have travelled a certain amount of kilometres

e. Shares held by a share trader.

5. Janine, an Australian resident, is a laboratory technician. During the year she signed a contract in Australia with a French company to work for the company in Ireland. Her salary is paid into a bank account she holds with the Bank of England in London. The source of her salary is:

a. Australia

b. France

c. England

d. Ireland

e. None of the above

6. Which of the following is not a test in Div 35 ITAA97 that will enable a taxpayer to claim non-commercial losses against other income?

a. The total assets of the particular activity exceed $500,000 in real property employed in the business.

b. The particular activity resulted in taxable income in three out of the last five years.

c. The loss relates to an activity with taxable income greater than $20,000.

d. The other assets used in the particular activity exceed $100,000, excluding motor vehicles.

e. The loss arises in relation to a professional arts business.

7. In November 1983, Alan purchased a block of land for $370,000 with the intention of one day building a shopping complex and leasing the shops to tenants. In May 1998 he changed his mind and decided to sell the land and so listed it with a real estate agent for $710,000. The property did not sell so in January 2004, on the advice of his agent, Alan decided to sub-divide the land which at that time had a market value of $1.2m. He obtained council approval to re-zone and sub-divided the land into 200 residential blocks. Alan managed the sub-division himself including organising council permits, road construction and installation of utilities. He did, however, enlist the real estate to market and sell the blocks. He had sold all of the blocks by 30 June 2020 and received a total of $6.8m. Based on the principles of cases such as Whitfords Beach, what would be the first element cost used by Alan to calculate any gain on the sale of the blocks?

a. $370,000

b. $490,000

c. $1.2m

d. $6.8m

e. $710,000