Jenny Jones is 40 years old, single and a resident individual.

For the year ended 30 June 2014, she has provided you with the following

information:

(1) She has received:

(i) gross salary, as a trainee Accountant, of $50,000;

(ii) gross pay and allowances, as a part-time member of the

Air Force Reserve, of $5,000;

(iii) interest, from a fixed deposit account, of $8,000; and

(iv) income from her caf business in Subiaco, Perth of

$70,000.

(2) As she has to look professional at work, she wore Gucci made

suits which cost her $2,500 in the income year. This is the dress

code expected of every employee by her employer.

(3) During the income year, she would regularly take work home to do

on her dinner table in her kitchen. She held regular dinner parties

with her friends in the kitchen during the income year. The kitchen

represents 10% of the total floor space of her home.

Her household expenses for the income year were: interest - $7,000,

rates and taxes - $3,000, insurance - $2,000 and electricity - $1,000.

(4) She also incurred expenses of $1,000 for laundry, uniform and steel-

capped boots in earning her Air Force Reserve income.

(5) She studied for the CPA Tax Module with the Australian Society of

CPA during Semester 2 2013 (3 July to 30 November 2013) as she

wanted to qualify as a full member and use the CPA designation one

day. She paid $1,000 for the Tax Module and $500 for CPA's annual

membership.

(6) In February 2014, she enrolled for the Master of Commerce degree

(majoring in Accounting) at Edith Cowan University (ECU). She paid

a total amount of $2,750 for University fees and text books. She also

incurred $750 being travel expenses from her place of work to ECU

and $250 from ECU to her home.

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(7) She also owns a caf business in Subiaco, Perth. It sells coffee

brewed from coffee beans imported from Sarawak, East Malaysia.

On 31 August 2010, she purchased the most technologically

advanced brewing machine from Coffee Tech Ltd ("Manufacturer")

for $45,000. The machine is used exclusively for the business and

has an effective life of 6 years.

Shortly after the purchase, the Manufacturer invented an

automated robotic arm attachment for this machine. The purpose

is to brew coffee with very little need for a barista (a person who

makes coffee). On 1 January 2012, she purchased the robotic arm

(1st Arm") for $6,000 and attached it to the brewing machine.

In the next financial year, the Manufacturer invented another

robotic arm which sprinkles chocolate powder onto the coffee

cups at the end of brewing. On 1 January 2013, she purchased

this additional robotic arm ("2nd Arm") for $4,000 and attached it to

the brewing machine.

The brewing machine was depreciated using the Prime Cost

method.

[For the purposes of this question, the number of days for the

relevant periods is as follows:

(i) From 31 August 2010 to 30 June 2011 304 days;

(ii) From 1 July 2011 to 30 June 2012 365 days;

(iii) From 1 January 2012 to 30 June 2012 181 days;

(iv) From 1 July 2012 to 30 June 2013 365 days;

(v) From 1 January 2013 to 30 June 2013 181 days;

(vi) From 1 July 2013 to 30 June 2014 365 days]

(8) Since she commenced her caf business, she had maintained a

Low Value Pool for qualifying assets. As at 30 June 2013, the

closing pool balance is $5,000.

During the 2013/2014 income tax year, she:

(i) purchased a lap top computer for $600 (75% taxable

purpose);

(ii) purchased a printer for $500 (100% taxable purpose);

(iii) purchased a photocopier for $1,500 (100% taxable

purpose);

(iv) sold a brewing machine for $8,000 (75% taxable

purpose). This asset was included in the Low Value Pool

as at 30 June 2013.

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As at 1 July 2013, the adjustable values of the following assets

(which were not included in the Low Value Pool at 30 June

2013) are as follows:

(1) a coffee making machine: $1,500 (100% taxable purpose

- depreciated using the diminishing value method);

(2) a desk top computer: $800 (100% taxable purpose -

depreciated using the diminishing value method); and

(3) a refrigerator: $900 (100% taxable purpose -

depreciated using the prime cost method).

She adds qualifying low-value assets to the pool whenever

appropriate.

(9) For the caf business, she incurred expenses amounting to

$60,000 (which amount is deductible under Section 8-1 of the

Income Tax Assessment Act 1997).

(10) With the consent of the Australian Tax Office ("ATO"), the cash

basis of accounting applies to her caf business.

(11) She had tax instalments of $3,000 (PAYG) deducted from her

salary income.

(12) She has no dependants and is not entitled to any dependant tax

offsets/rebates.

Advise Jenny on her tax liability (including Medicare) for the year ended 30

June 2014 based on the information above.