Katherine McDonald runs a business called Kate's Confectionery and produced a wide variety of confectionery for domestic and export markets. During the December quarter, Katherine held a Christmas party for all her customers to thank them for their business during the year. Katherine also purchased a new car which she uses 70% for business purposes and 30% for personal use. Kate's Confectionery is registered for GST and reports quarterly on an accrual basis. She provides you with the following information relating to the December quarter.

All amounts include GST where applicable.

INCOME

$

Domestic confectionery sales

191,400

Export confectionery sales

50,500

Domestic freight charges

9,100

Domestic freight on export sales, GST free (i.e. freight to the point of departure within Australia)

2,900

Prior year Income Tax refund

6,241

Discounts provided to customers for early payment

(invoiced prior quarter)

1,000

Interest charged on overdue accounts

200

Dividends received

3,789

Proceeds from sale of old motor vehicle (100% business use)

8,500

EXPENSES

$

Salaries & wages

204,610

Sugar & cocoa

33,000

Milk & butter

13,838

Packaging supplies

5,825

Entertainment - customer Christmas party (non-deductible)

2,050

Freight

7,357

Interest paid on loans

590

New motor vehicle (70% of this amount is business use and 30% is private use)

30,000

Insurance paid (no Stamp Duty)

120

Cleaning

2,450

Printing & stationery

1,848

Required: prepare the GST Calculation Worksheet for the December quarter (next page).

GST amounts you owe the Tax Office from sales

G1

Total sales (including and GST)

G1

$

262,600

G2 Export sales

G2 $50,500

G3 Other GST-free sales

G3 $ 2,900

G4 Input taxed sales

G4

$ 200

G5

G2 + G3 + G4

G5

$

53,600

G6

Total sales subject to GST

G6

$

209,000

(G1 minus G5)

G7

Adjustments (if applicable)

G7

$ 1,000

G8

Total sales subject to GST after adjustments

G8 $ 210,000

(G6 + G7)

G9

GST on sales (G8 divided by eleven)

G9 $ 19,090

GST amounts the Tax Office owes you from purchases

G10

Capital purchases

G10

$

30,000

(including and GST)

G11

Non-capital purchases

G11

$

67,078

(including any GST)

G12

G10 + G11

G12

$

97,078

G13

Purchases for making input taxed sales

G13

$

0

G14

Purchases without GST in the price

G14

$

47,428

G15

Estimated purchases for private use

G15

$

11,050

or not income tax deductible

G16

G13 + G14 + G15

G16

$

58,478

G17

Total purchases subject to GST

G17

$

38,600

(G12 minus G16)

G18

Adjustments (if applicable)

G18 $ 0

G19

Total purchases subject to GST after

G19 $ 38,600

adjustments (G17 + G18)

G20

GST on purchases (G19 divided by eleven)

G20

$ 3,509