Question
COMPANY INCOME AND TAX LIABILITY Jee Jee Jees is a family business chain of 3 Italian restaurants in Melbourne (located city, north and south) owned
COMPANY INCOME AND TAX LIABILITY
Jee Jee Jees is a family business chain of 3 Italian restaurants in Melbourne (located city, north and south) owned by 3 shareholder brothers, Joseph, Jacob and James. Joseph advises the accounts for 2020 income year reveal the following and is interested in the Tax Law that applies to those balances, and the tax liability of the company.
Dividends received (50% franked) $147,000
ex general rate company) Net capital gain discounted 50% 100,000
Sales (Cash basis) 1,950,000
Closing stock 41,500
Opening Stock 20,000
Purchases 500,000
Various general business expenses incurred $721,000
- Advertising 9,000
- Electricity 18,000
- Insurance 20,000
- Interest on loan - premises 120,000
- Rent 150,000
- Staff wages 400,000
- Telephone 4,000
Various Specific expenses incurred
- Depreciation $100,000
- Bad Debts 2,000
- Repairs 27,000
- Tax agent expenses 3,000
- Staff Superannuation 37,000
- FBT 15,000
- ATO Late Payment Penalty 3,000
- Legal costs ATO Objection 4,000
- Gift to Red Cross 1,000
-Prior year Tax Loss 2,000
Advise what is the taxable income of the company using the above information, correct Joseph as necessary.
Advise the tax liability of the company.
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