0. 1. Identify any discrepancies by reconciling the bank statement against the claims made by Julie Palmer (table 1 provided).

   2. 2) Recalculate the assessable income and allowable deductions with explanations. Include section numbers and/or cases in your explanations.

   3. 3) Advise any further actions required due to the discrepancies.

You are working as a tax agent at Rocket Tax Pty Ltd (456 George Street Sydney NSW 2000) and one of your clients (Julie Palmer: Unit 15/69 Smail Street Ultimo NSW 2007) has come to you for assistance. Julie is a self-employed web designer and due to her heavy work load and unpredictable working hours has not had the time to sort out her tax matters.

Julie spends a lot of time organising her business expenses for tax, however she has lost a few receipts and tax invoices for the last quarter of the financial year.
She said that she has already lodged the tax return based on the details provided in Table 1 (she estimated income & expenses for the June quarter 2020, as listed in the table 1 below)

Table 1: estimated income & expenses
Business income $10,000

Education expenses $2,000

Software subscription $800

Internet expenses $225

Telephone expenses $240

Rent $6,000

Income tax expense (PAYG instalment) $1,200

Travel to work (city rail) $500

Health insurance $300

Child care $1,000

Uniform $200

Depreciation on Computer (3 years useful life) $567

During December 2020, Julie advises you that she found the missing bank statement and receipts, which list the business income and expenses & other payments for the period June quarter 2020. Assume all amounts were correctly reported for other periods.
Julie asked you to review the following Bank statement and identify discrepancies in the income/expense claims made versus the actual income/expenses incurred.

Details of the Bank statement are as follows:

Period: 01 April 2020 to 30 June 2020 ( Please refer table at the top)

Additional information:

• Julie’s business is not registered for GST as her annual income is less than $75,000.

• Julie uses her phone and internet 40% for work purposes.

• Julie pays child care fees so that she can go to work.

• Julie purchased blouse and black pants only to wear at work.

• 
  

• You are required to:

  Draft a business letter to Julie Palmer. In the letter, students must

1. 1) Identify any discrepancies by reconciling the bank statement against the claims made by Julie Palmer (table 1 provided).

2. 2) Recalculate the assessable income and allowable deductions with explanations. Include section numbers and/or cases in your explanations.

3. 3) Advise any further actions required due to the discrepancies.

Details of the Bank statement are as follows: Period: 01 April 2020 to 30 June 2020 Date Transaction details Withdrawal Deposit Balance Opening balance (April 2020) 1/04/2020 Paid for workshop webinar - Design course 3/04/2020 Storage boxes for shoes 4/04/2020 Monthly city rail (home to work) 9/04/2020 Fitness first (direct debit) 13/04/2020 Vodafone (direct debit) 12/04/2020 Services Income 15/04/2020 Electricity (Energy Australia) Home 14/04/2020 Medi Bank Private (Health) 7,500 7,340 7,085 6,935 6,836 160 255 150 99 80 6,756 11,256 10,881 10,786 10,711 8,711 8,456 8,331 8,331 8,271 4,500 375 95 16/04/2020 Telstra Internet 75 17/04/2020 Office rent 23/04/2020 Bavarian caf cake for birthday 25/04/2020 Interest charges on her personal loan 28/04/2020 March quarter PAYG instalment tax paid 1/05/2020 Paid for workshop webinar - Design course 2,000 255 125 60