2. Simon Pty Ltd (Simon) manufactures coffee lollies which they sell directly to the public from...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
2. Simon Pty Ltd (Simon) manufactures coffee lollies which they sell directly to the public from their shop front. They also sell wholesale directly to specialist sweet shops. Simon has a 30 days payment term and tax is accounted for on an accrual's basis. During 2020-21 there was a small fire in the kitchen where the coffee lollies are made which caused damage to the smoke extractor. Also, during the tax year, Simon was informed that one of the businesses it sells wholesale to (Coffee & Cake) liquidated and there is no prospect to recover debt. As at 30 June 2021, Simon's accounts showed the following transactions. 1.Work carried out to remedy the effect of the fire. (a) Repainting the wall damaged by the fire cost $1,500. (b) $3,000 to replace the work bench as it was cheaper to replace than repair. (c) The smoke extractor is only part (10%) of the exhaust system for the kitchen and there was no equivalent one available, so it was replaced at a cost of $1,500 with one that was similar but looked better. 2. Provisions for doubtful debts were increased by $4,000 due to the declining economic climate. 3. A note was made in the electronic accounting system that an invoice for $2,800 to Coffee & Cake for goods supplied was written-off as bad, as it had not been paid and all attempts to recover payment had failed. Determine if Simon will be entitled to a deduction under the general or specific deduction provisions as a result of the transactions listed. 2. Simon Pty Ltd (Simon) manufactures coffee lollies which they sell directly to the public from their shop front. They also sell wholesale directly to specialist sweet shops. Simon has a 30 days payment term and tax is accounted for on an accrual's basis. During 2020-21 there was a small fire in the kitchen where the coffee lollies are made which caused damage to the smoke extractor. Also, during the tax year, Simon was informed that one of the businesses it sells wholesale to (Coffee & Cake) liquidated and there is no prospect to recover debt. As at 30 June 2021, Simon's accounts showed the following transactions. 1.Work carried out to remedy the effect of the fire. (a) Repainting the wall damaged by the fire cost $1,500. (b) $3,000 to replace the work bench as it was cheaper to replace than repair. (c) The smoke extractor is only part (10%) of the exhaust system for the kitchen and there was no equivalent one available, so it was replaced at a cost of $1,500 with one that was similar but looked better. 2. Provisions for doubtful debts were increased by $4,000 due to the declining economic climate. 3. A note was made in the electronic accounting system that an invoice for $2,800 to Coffee & Cake for goods supplied was written-off as bad, as it had not been paid and all attempts to recover payment had failed. Determine if Simon will be entitled to a deduction under the general or specific deduction provisions as a result of the transactions listed.
Expert Answer:
Answer rating: 100% (QA)
1 Work carried out to remedy the effect of the fire a Repainting the wall damaged by the fire cost 1... View the full answer
Related Book For
Principles of Auditing An Introduction to International Standards on Auditing
ISBN: 978-0273768173
3rd edition
Authors: Rick Hayes, Philip Wallage, Hans Gortemaker
Posted Date:
Students also viewed these accounting questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
In Year 1, Victoria Textiles Limited decided that its Asian operations had expanded such that an Asian office should be established. The office would be involved in selling Victorias current product...
-
As a bakery business continues to grow, cash flow has become more of a concern. The board of directors would like to maintain the market share price, so a discussion ensues about issuing a stock...
-
The engine of a Ferrari F355 Fl sports car takes in air at 20.0C and 1.00 atm and compresses it adiabatically to 0.0900 times the original volume. The air may he treated as an ideal gas with Y =...
-
Compute the indicated vectors and also show how the results can be obtained geometrically. b + c Data From Exercise 1 (a) (b) (c) (d) 3 a b = 3
-
How might an executives comments to Wall Street analysts affect demand forecasts, and what are the consequences of doing so? LO.1
-
Superior Woods manufactures jewelry boxes. The primary materials (wood, brass, and glass) and direct labor are traced directly to the products. Manufacturing overhead costs are allocated based on...
-
a) What will be the output for each print statement of the code given below. list1=[1, 2, 3, 4, 7, 1, 9] list1.pop(1) print (list1) list1.remove(1) print (list1) list1.clear() print(list1) del list1...
-
What are the main issues that the traditional approach emphasizes in respect to Apples dividend policy? What are the main issues that the behavioral approach emphasizes in respect to Apples dividend...
-
A project has an initial cost of $40,000, expected net cashinflows of $11,000 per year for 6 years, and a cost of capital of11%. What is the project's NPV? (Hint: Begin byconstructing a time line.) 2...
-
A four-lane urban freeway (two lanes in each direction) is located on rolling terrain and has 12-ft lanes, no lateral obstructions within 6 ft of the pavement edges, and an interchange every 2 miles....
-
In January, 1993, there were about 1,313,000 internet hosts. During the next five years, the number of hosts increased by about 100% per year. a. Write a model giving the number h (in millions) of...
-
Allison, Inc., produces two products, X and Y, in a single joint process. Last month the joint costs were P75,000 when 10,000 units of Product X and 15,000 units of Product Y were produced....
-
8+0.5 = 4. Consider a system with a lead compensator Ge(s) = +0.13 followed by a plant G(s) = 10 Determine a value for a gain K on the error signal such that the phase margin s(s+1) of the open-loop...
-
Standard Normal Distribution. In Exercises 17-36, assume that a randomly selected subject is given a bone density test. Those test scores are normally distributed with a mean of 0 and a standard...
-
Transcribed image text: Question 1 (2 ponts) Indicate whether each of the following is properly classified as direct material, direct labor, manufacturing overhead or period cost. Logs in a sawmill...
-
Explain five different cases of income exempt from tax with clear examples.
-
Audit Planning Memorandum Plan Part. Wigila Swaiaty, a for-profit cooperative, was organized in 1954 in Gdansk, Poland, to produce and distribute local crafts such as natural material Christmas...
-
Bheda Bhasya, Ltd., a company from Ahmadabad, India, without consulting its Chartered Accountant (CA), has changed its accounting so that it is not in accordance with international accounting...
-
The firm of Hayes & Hu, Ltd., personal financial advisors in the Notting Hill section of London, has asked Joseph Small man, Chartered Accountant (CA), to recommend a computer information system....
-
What is a fixed menu? a cycle menu?
-
What are specialty menus?
-
In what three ways should a menu be balanced?
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App