Harry operated his own business selling pool equipment, materials and servicing swimming pools. Sales of equipment and materials were paid at the time of sale, however, pool services were carried out by his staff and invoices were left at the customers home and were generally paid by the homeowners within 30 days of service. Sales of equipment and materials and receipts for pool services were $930,000. Service calls which had been made during the prior year but paid in the current year were $30,000 (and are included in the $930,000 above) and at 30 June 2020 unpaid pool services totaled $43,000.

Harry also received a dividend of $28,000 franked to 30% with franking credits of $3,600.

On 1 April 2020 Harry won a jackpot of $150,000 in a lottery.

Harrys opening stock was worth $130,000 (valued using cost price in the previous year). Purchases during the current year were $220,000 and at the end of the current year his stock on hand was worth $110,000 (cost price), $150,000 (market selling value) and $120,000 (replacement price).

Harry started his second outlet in its current premises on 1 August 2019. He took out a loan on that date for $400,000. Harry used his own mortgage broker to find him the best loan and paid the broker $400 to do this. In addition he paid stamp duty of $1,000 on the loan which was to be repaid in 3 years.

Expenses which relate primarily to the business are as follows:

$

Accounting fees 4,200

Bank fees 1,400

Donation to Australian political party 1,000

Electricity (this included $1,500 on his home) 10,000

Interest the loan was an interest-only loan taken out 8 years ago. Harry used 15% of the loan for renovations to his home 8,000

Interest on new loan taken out on 1 August 2019 15,000

Rent paid monthly on the first of each month 80,000

Rent prepaid for 3 years on 1 April 2020 360,000

Stationery 3,300

Superannuation staff 25,200

Superannuation self 20,000

Telephone expenses 25,600

Wages - staff 280,000

Wages family and friends. This included $50,000 to his girlfriend Elise who worked for 3 days a week in the business. Another worker who also did the same job for 3 days a week was only paid $40,000. Other wages to family were in accordance with award rates. 80,000

Notes:

Harry had a carried forward operating loss of $80,000 from the previous year this included a payment for his personal superannuation of $5,000.

Required:

Calculate Harrys taxable income and net tax payable for the year ended 30 June 2020 including Medicare Levy.