In relation to Australian taxation, please identify, analyse and apply the taxation treatment to the following issues/matters listed below, and indicate the recommended action based on a conclusion (apply the IRAC principle where appropriate). Please ensure to fully support arguments with relevant authority, for example, tax legislation and case law. 1. Trading Stock - taxation treatment i.e. valuation, inclusion in assessable income / deductions, deductibility of obsolete stock, advise on the value that is deductible or assessable. Include purchases in this topic 2. Depreciation - for the office furniture already owned + new assets acquired, plus the capital assets acquired for new shop set-up. Please include calulations / workings. 3. Bad Debt & Provision for Doubtful Debt

ACC30005 Business Overview Grant and Mary Richardson, aged 57 and 56 respectively, own a computer accessories retail business in partnership called 'Computer Solutions', which operates in Camberwell, Victoria. The business has operated from these premises for 10 years. The Richardsons decided to expand their business and recently opened a new store on the 1 March 2023, in Wantirna,| Each year, the Richardson's go overseas to an international 'Computer Trade Show' to become aware of the latest developments in computer accessories. During the 2022-23 financial year, the trade show was held in Tokyo, Japan, where the Richardson''s were fortunate to sign a franchise agreement to distribute 'Onetel', a new range of computer software. The cost of the franchise included a 'sign on' payment of $35,000 plus a payment of 1% % of sales revenue on the software. While Grant and Mary own the shop in Camberwell, they decided to lease the premises in Wantirna. One of the reasons for doing this was because of the offer of a lease incentive by way of a twelve-month rent-free period and a free fit-out, valued at $50,000. In October 2022, the Richardson's became aware that a property developer had sought approval to redevelop the Wantirna site as it was suitable for their business expansion. Consequently, the Richardson''s spent $15,000 in legal costs in successfully opposing the development. The Richardson''s also jointly own a rental property in Waverley, which yielded a rental of $60,000 during 2022-23 and the expenses claimed, including repairs and maintenance, came to $15,000 for the year. Grant independently also provides private on-site services and maintenance to clients with regards to common computer software issues, and derived $12,000 from this activity, incurring expenses of $2,300. Further, Grant derived $5,000 in bank interest and received dividends of $18,000 (including $7,714 franking credits) during the 2022-23 tax year. Grant had no other deductions for the year and the Richardsons do not have any children. Cash receipts $ Sales to Customers 1,800,000 Sales Bonus (note ix) 8,000 Cash expenditure $ Purchase of Stock (note ii) 700,500 Salaries (note vi) 350,000 Set up costs - Wantirna (note v) 18,700 Rental payments 160,000 Telephone 4,000 Electricity 5,600 Overseas travel expenses (note vii) 18,000 Franchise: Cost 35,000 Royalty (1.5% of $1,800,000) 27,000 Car expenses (Running costs) 25,100 Legal costs (note x) 11,290 Advertising 13,800 GST 163,636 Furniture (note iii) 33,300 Entertainment (note viii) 10,800 Gas 4,300 Miscellaneous 2,950 Sales Bonus (note ix) 8,000 Note: All amounts include Australian GST where applicable. Notes: $ i) Outstanding creditors 30/06/23 16,700 Outstanding debtors 30/06/23 77,000 At the year ending 30/6/23, a provision for doubtful debts has been raised equal to 1.5% of sales. Also, during that year, $17,000 of outstanding debts were written off as bad. i) Opening stock: Cost 480,000 +Purchases 700,500 -closing stock at cost 390,000 Closing stock values: 30/6/23 Cost 390,000 Replacement Cost 425,000 Market Selling Value 480,000 At the end of the year, a stocktake reveals that some of the stock is obsolete. Consequently, a write down of stock (at cost of $20,000) has been made to $11,000. iii) iv) Office Furniture Opening adjusted value Acquisition of furniture during 2022/23: Desk and Chairs Computers/keyboards/printers Partitions Care values related to the following vehicles Toyota Corolla Toyota Delivery van Ford Falcon* BMW#* Cost 3,300 19,000 11,000 Cost 28,700 42,000 58,000 85,000 25,000 Acquis date 01/07/22 15/08/22 9/07/22 Acquis date 12/10/19 11/8/19 02/11/19 104/12/19 * The two cars are used by Grant and Mary Richardson, and it is estimated that they are used 65% for business. During the year on 15/3/23, the engine in the delivery van broke down. As a result, a new engine was put in the van at a cost of $14,500. The engine was a more powerful one modified to run on gas. V) vi) vii) viii) iX) Set-up Costs - New Premises in Wantirna: Stock removal and relocation Staff Training Special cabinets and office set up Salaries: General Staff Wages - Grant - Mary Overseas Travel Airfares Accommodation Fare Registration Meals and incidentals Entertainment Christmas Parties-staff Clients Sales Bonus 6,700 5,000 7,000 180,000 85,000 85,000 8,600 6,000 1,000 2,700 4,800 6,000 The sales bonus of $8,000 was received from the Computer Retailers Association for 'Computer Solutions' achieving the highest sales for their products in the June Quarter