Frank is the owner and operator of a successful strawberry farm in NSW. During the 2019/20 income year, Frank reports the following transactions (GST included where applicable):

Sale of fresh strawberries to major retailers $375,000

Sale of strawberry pie and ice cream at the farm caf $250,000

Interest received on business bank account $15,000

Salary for teaching a small business course at TAFE $45,000

Frank also incurs the following expenses (inclusive of GST where applicable)

Seeds and seedling equipment $27,500

Fertiliser and pesticides $15,000

Ice cream and other ingredients for making caf foods $75,000

Computer for private use $5,000

Wages (1 x employee) $25,000

(a)Calculate the GST payable on supplies for the 2019/20 income year

(b)Calculate the GST tax credits for the 2019/20 income year

What is Franks net GST liability for the 2019/20 income year?

Value = GST exclusive price $100,000

GST = 1/10th of the value or $10,000 (OR) 1/11th of the price

Price = GST inclusive price $110,00 (Value + GST)

GST Rate = 10% of the value of the item OR 1/11th of the price