a) Prepare the schedule of payroll information for wages paid, including PAYG withholding deductions, and net wages for each employee by week.
b) Calculate the employers statutory Superannuation Guarantee obligations for each employee for the quarter.
c) Provide a short definition and discussion of GST taxable supplies. Explain and classify each transaction item listed, including wages and superannuation, by the type of GST supply, and calculate any GST included in the price.
d) Provide a short definition and discussion of creditable acquisitions and discuss what conditions need to be met before Born Again Bags can claim input tax credits in relation to the expenses listed? Explain whether each of the acquisitions is a creditable acquisition.
e) prepare to complete a fully labelled Business Activity Statement for the quarter ended 30 June 2020.
CASE STUDY INFORMATION Helga Hemp owns Born Again Bags, a not for profit business that is registered for GST. Born Again Bags supports the diversion of post-consumer material (waste) into reusable bags to replace plastic bags. Fabric is gathered or donated and made into cloth bags which are sold to customers via an online shop. Born Again Bags also receives income from donations and grants. Receipts for the June quarter (inclusive of GST where appropriate): Sales of bags Donations Grants Trade-in of industrial sewing machine previously used in the business Bags donated to local growers' co-op (market value $540) $58,750 $35,750 $32,890 $3,000 $0 Expenses for the June quarter (inclusive of GST where appropriate): Fabric and thread purchases Fabric donated (market value $8000) Subcontractors (not registered for GST) Rent Dinner at local restaurant* Accommodation for staff at conferences (Hotel) Airfares for staff to attend conferences** Bookkeeping services First Aid courses for staff members New sewing machine Business Loan (Principal $690 and interest $80) $13,200 $0 $4,400 $7,200 $330 $1,870 $4,850 $1,430 $660 $8,799 $500 *Dinner at the local restaurant was for Helga, the owner of Born Again Bags, and a commercial garment manufacturer who donates waste fabric to the business. For income tax purposes this amount would be classified as entertainment and a deduction would be denied under s32-5 ITAA97. **During the period Born Again Bags paid for air fares for staff to attend a conference in Sydney where Helga was speaking. Helga was ill the week before the conference and could not attend. Consequently, $1,650 of the airfares mentioned above were not used. The airline did not refund this amount. Born Again Bags also imported labels from Canada. The cost of the labels was $6600 and the freight was $145 (Australian Dollars). The supplier in Canada did not charge GST on these goods. 2 Salaries & Wages: Born Again Bags has 6 employees: 2 office staff and 4 machinists. They are paid weekly. All employees are entitled to the tax-free threshold. Penny, Quentin, Rose, and Steve are all permanent employees. Their weekly pay is based on an annual salary: and paid salaries. Annual salaries are: Penny: $39,000 Quentin: $24,440 Rose: $62,400 Steve: $18,720 Sharyn and Terry are casual employees and their weekly wage is based on the hours they work. Their work hours are set out in the table below. Employee/Week Sharyn Terry $24/hour $16/hour Week 1 - April 10 8 Week 2 - April 10 7 Week 3 - April 15 10 Week 4 - April 15 12 Week 5 - May 0 10 Week 6 - May 0 10 Week 7 - May 0 15 Week 8 - May 5 12 Week 9 - May 10 10 Week 10 - June 10 12 Week 11 - June 8 15 Week 12 - June 10 8 Week 13 - June 8 Business Activity Statement: The ATO has advised that Helga Hemp, as an individual taxpayer, has a quarterly income tax instalment of $6,600. This amount is payable by her personally in the June quarter. She has chosen to pay the fixed amount each quarter. Business Activity Statement: The ATO has advised that Helga Hemp, as an individual taxpayer, has a quarterly income tax instalment of $6,600. This amount is payable by her personally in the June quarter. She has chosen to pay the fixed amount each quarter. In the last FBT year fringe benefits were provided to the office manager. There is an FBT instalment showing on the BAS of $1,800. No Fringe Benefits have been provided in the current FBT year. There are no liabilities for WET or LCT, and no FTC. Pay as you go (PAYG) withholding NAT 1005 Weekly tax table For payments made on or after 1 July 2018 Includes the tax offset ready reckoner on page 9. 106.00 Amount to be withheld With No Weekly tax-free tax-free earnings threshold threshold 1 2 3 $ $ $ 1.00 2.00 3.00 1.00 4.00 1.00 5.00 1.00 6.00 1.00 7.00 1.00 8.00 2.00 9.00 2.00 10.00 2.00 11.00 2.00 12.00 2.00 13.00 2.00 14.00 3.00 15.00 3.00 16.00 3.00 17.00 3.00 18.00 3.00 19.00 4.00 ||||||||||||||||||| Amount to be withheld With No Weekly tax-free tax-free earnings threshold threshold 1 2 3 $ $ $ 36.00 7.00 37.00 7.00 38.00 7.00 39.00 7.00 40.00 8.00 41.00 8.00 42.00 8.00 43.00 8.00 44.00 8.00 45.00 9.00 46.00 9.00 47.00 9.00 48.00 9.00 49.00 9.00 50.00 9.00 51.00 10.00 52.00 10.00 53.00 10.00 54.00 10.00 ||||||||||||||||||| Amount to be withheld With No Weekly tax-free tax-free earnings threshold threshold 1 2 3 $ $ 71.00 13.00 72.00 14.00 73.00 14.00 74.00 14.00 75.00 15.00 76.00 15.00 77.00 15.00 78.00 15.00 79.00 16.00 80.00 16.00 81.00 16.00 82.00 16.00 83.00 16.00 84.00 17.00 85.00 17.00 86.00 17.00 87.00 17.00 88.00 18.00 89.00 18.00 ||||||||||||||||||| Amount to be withheld With No Weekly tax-free tax-free earnings threshold threshold 1 2 3 $ $ 22.00 107.00 22.00 108.00 22.00 109.00 23.00 110.00 23.00 111.00 23.00 112.00 23.00 113.00 23.00 114.00 24.00 115.00 24.00 116.00 24.00 117.00 24.00 118.00 25.00 119.00 25.00 120.00 25.00 121.00 25.00 122.00 26.00 123.00 26.00 124.00 26.00 |||||||||||||||||||| Amount to be withheld With No Weekly tax-free tax-free tax-free earnings threshold threshold 1 2 3 S $ $ 141.00 30.00 142.00 30.00 143.00 31.00 144.00 31.00 145.00 31.00 146.00 31.00 147.00 31.00 148.00 32.00 149.00 32.00 150.00 32.00 151.00 32.00 152.00 33.00 153.00 33.00 154.00 33.00 155.00 33.00 156.00 34.00 157.00 34.00 158.00 34.00 159.00 34.00 |||||||||||||||||||| A 1 GROSS FOR CALENDAR SUPER @ MONTH 9.5% HOURLY RATE GROSS TAX NET WEEK EMPLOYEE HOURS 1 Employee 1 1 Employee 2 1 Employee 3 1 Employee 4 1 Employee 5 1 Employee 6 2 2 MONTH 3 APRIL 4 APRIL 5 APRIL 6 APRIL 7 APRIL 8 APRIL 9 APRIL 10 APRIL 11 APRIL 12 APRIL 13 APRIL 14 APRIL 15 16 17 18 2 2 NNN Discussion of statute law including sections and definitions: 1 2 3 ITEM TYPE OF SUPPLY GST EXPLANATION GST INCLUSIVE AMOUNT 4 Receipts TOTAL SALES Expenses 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 $ $ $ $ $ $ $ $ G10 1 E BAS 2 3 OPTION 1: Calculate GST & report quarterly SUMMARY 4 1A GST on Sales 5 G1 Total Sales $ 1C WET 6 Include GST YES/NO 1E LCT G2 Export Sales $ 4 PAYG Withheld 8 G3 Other GST-Free Sales $ 5A PAYG income tax instalment 9 Capital Purchases $ 6A FBT instalment 10 G11 Non-capital Purchases $ 7C FTC over claim 11 8A 12 PAYG tax withheld 13 1B GST on purchases 14 W1 Total Salary & Wages $ 1D WET refundable 15 W2 Amount Withheld $ 1F LCT refundable 16 W4 No ABN $ 5B PAYG instalment credit 17 W3 Other amount $ 6B FBT credit 18 W5 total amounts withheld $ 7D FTC credit 19 8B 20 OPTION 1: Pay a PAYG instalment amount quarterly 21 22 T7 $ PAYMENT OR REFUND 23 Is 8A more than 8B? 24 FBT INSTALMENT 25 Your payment amount 26 F1 $ 27 F2 Est FBT for year $ 28 F3 Varied amount payable $ 29 F4 Variation Code Cover Sheet Wages GST Blank BAS Fields + $ $ $ $ $ $ $ YES/NO $ Ready CASE STUDY INFORMATION Helga Hemp owns Born Again Bags, a not for profit business that is registered for GST. Born Again Bags supports the diversion of post-consumer material (waste) into reusable bags to replace plastic bags. Fabric is gathered or donated and made into cloth bags which are sold to customers via an online shop. Born Again Bags also receives income from donations and grants. Receipts for the June quarter (inclusive of GST where appropriate): Sales of bags Donations Grants Trade-in of industrial sewing machine previously used in the business Bags donated to local growers' co-op (market value $540) $58,750 $35,750 $32,890 $3,000 $0 Expenses for the June quarter (inclusive of GST where appropriate): Fabric and thread purchases Fabric donated (market value $8000) Subcontractors (not registered for GST) Rent Dinner at local restaurant* Accommodation for staff at conferences (Hotel) Airfares for staff to attend conferences** Bookkeeping services First Aid courses for staff members New sewing machine Business Loan (Principal $690 and interest $80) $13,200 $0 $4,400 $7,200 $330 $1,870 $4,850 $1,430 $660 $8,799 $500 *Dinner at the local restaurant was for Helga, the owner of Born Again Bags, and a commercial garment manufacturer who donates waste fabric to the business. For income tax purposes this amount would be classified as entertainment and a deduction would be denied under s32-5 ITAA97. **During the period Born Again Bags paid for air fares for staff to attend a conference in Sydney where Helga was speaking. Helga was ill the week before the conference and could not attend. Consequently, $1,650 of the airfares mentioned above were not used. The airline did not refund this amount. Born Again Bags also imported labels from Canada. The cost of the labels was $6600 and the freight was $145 (Australian Dollars). The supplier in Canada did not charge GST on these goods. 2 Salaries & Wages: Born Again Bags has 6 employees: 2 office staff and 4 machinists. They are paid weekly. All employees are entitled to the tax-free threshold. Penny, Quentin, Rose, and Steve are all permanent employees. Their weekly pay is based on an annual salary: and paid salaries. Annual salaries are: Penny: $39,000 Quentin: $24,440 Rose: $62,400 Steve: $18,720 Sharyn and Terry are casual employees and their weekly wage is based on the hours they work. Their work hours are set out in the table below. Employee/Week Sharyn Terry $24/hour $16/hour Week 1 - April 10 8 Week 2 - April 10 7 Week 3 - April 15 10 Week 4 - April 15 12 Week 5 - May 0 10 Week 6 - May 0 10 Week 7 - May 0 15 Week 8 - May 5 12 Week 9 - May 10 10 Week 10 - June 10 12 Week 11 - June 8 15 Week 12 - June 10 8 Week 13 - June 8 Business Activity Statement: The ATO has advised that Helga Hemp, as an individual taxpayer, has a quarterly income tax instalment of $6,600. This amount is payable by her personally in the June quarter. She has chosen to pay the fixed amount each quarter. Business Activity Statement: The ATO has advised that Helga Hemp, as an individual taxpayer, has a quarterly income tax instalment of $6,600. This amount is payable by her personally in the June quarter. She has chosen to pay the fixed amount each quarter. In the last FBT year fringe benefits were provided to the office manager. There is an FBT instalment showing on the BAS of $1,800. No Fringe Benefits have been provided in the current FBT year. There are no liabilities for WET or LCT, and no FTC. Pay as you go (PAYG) withholding NAT 1005 Weekly tax table For payments made on or after 1 July 2018 Includes the tax offset ready reckoner on page 9. 106.00 Amount to be withheld With No Weekly tax-free tax-free earnings threshold threshold 1 2 3 $ $ $ 1.00 2.00 3.00 1.00 4.00 1.00 5.00 1.00 6.00 1.00 7.00 1.00 8.00 2.00 9.00 2.00 10.00 2.00 11.00 2.00 12.00 2.00 13.00 2.00 14.00 3.00 15.00 3.00 16.00 3.00 17.00 3.00 18.00 3.00 19.00 4.00 ||||||||||||||||||| Amount to be withheld With No Weekly tax-free tax-free earnings threshold threshold 1 2 3 $ $ $ 36.00 7.00 37.00 7.00 38.00 7.00 39.00 7.00 40.00 8.00 41.00 8.00 42.00 8.00 43.00 8.00 44.00 8.00 45.00 9.00 46.00 9.00 47.00 9.00 48.00 9.00 49.00 9.00 50.00 9.00 51.00 10.00 52.00 10.00 53.00 10.00 54.00 10.00 ||||||||||||||||||| Amount to be withheld With No Weekly tax-free tax-free earnings threshold threshold 1 2 3 $ $ 71.00 13.00 72.00 14.00 73.00 14.00 74.00 14.00 75.00 15.00 76.00 15.00 77.00 15.00 78.00 15.00 79.00 16.00 80.00 16.00 81.00 16.00 82.00 16.00 83.00 16.00 84.00 17.00 85.00 17.00 86.00 17.00 87.00 17.00 88.00 18.00 89.00 18.00 ||||||||||||||||||| Amount to be withheld With No Weekly tax-free tax-free earnings threshold threshold 1 2 3 $ $ 22.00 107.00 22.00 108.00 22.00 109.00 23.00 110.00 23.00 111.00 23.00 112.00 23.00 113.00 23.00 114.00 24.00 115.00 24.00 116.00 24.00 117.00 24.00 118.00 25.00 119.00 25.00 120.00 25.00 121.00 25.00 122.00 26.00 123.00 26.00 124.00 26.00 |||||||||||||||||||| Amount to be withheld With No Weekly tax-free tax-free tax-free earnings threshold threshold 1 2 3 S $ $ 141.00 30.00 142.00 30.00 143.00 31.00 144.00 31.00 145.00 31.00 146.00 31.00 147.00 31.00 148.00 32.00 149.00 32.00 150.00 32.00 151.00 32.00 152.00 33.00 153.00 33.00 154.00 33.00 155.00 33.00 156.00 34.00 157.00 34.00 158.00 34.00 159.00 34.00 |||||||||||||||||||| A 1 GROSS FOR CALENDAR SUPER @ MONTH 9.5% HOURLY RATE GROSS TAX NET WEEK EMPLOYEE HOURS 1 Employee 1 1 Employee 2 1 Employee 3 1 Employee 4 1 Employee 5 1 Employee 6 2 2 MONTH 3 APRIL 4 APRIL 5 APRIL 6 APRIL 7 APRIL 8 APRIL 9 APRIL 10 APRIL 11 APRIL 12 APRIL 13 APRIL 14 APRIL 15 16 17 18 2 2 NNN Discussion of statute law including sections and definitions: 1 2 3 ITEM TYPE OF SUPPLY GST EXPLANATION GST INCLUSIVE AMOUNT 4 Receipts TOTAL SALES Expenses 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 $ $ $ $ $ $ $ $ G10 1 E BAS 2 3 OPTION 1: Calculate GST & report quarterly SUMMARY 4 1A GST on Sales 5 G1 Total Sales $ 1C WET 6 Include GST YES/NO 1E LCT G2 Export Sales $ 4 PAYG Withheld 8 G3 Other GST-Free Sales $ 5A PAYG income tax instalment 9 Capital Purchases $ 6A FBT instalment 10 G11 Non-capital Purchases $ 7C FTC over claim 11 8A 12 PAYG tax withheld 13 1B GST on purchases 14 W1 Total Salary & Wages $ 1D WET refundable 15 W2 Amount Withheld $ 1F LCT refundable 16 W4 No ABN $ 5B PAYG instalment credit 17 W3 Other amount $ 6B FBT credit 18 W5 total amounts withheld $ 7D FTC credit 19 8B 20 OPTION 1: Pay a PAYG instalment amount quarterly 21 22 T7 $ PAYMENT OR REFUND 23 Is 8A more than 8B? 24 FBT INSTALMENT 25 Your payment amount 26 F1 $ 27 F2 Est FBT for year $ 28 F3 Varied amount payable $ 29 F4 Variation Code Cover Sheet Wages GST Blank BAS Fields + $ $ $ $ $ $ $ YES/NO $ Ready
