Question
MaxScumbagisaprimaryproducerwhocommencedbusinessin2017/18. Thefollowingdata relatestoMax'sfirstfive yearsoftrading: Year Taxad/e PPIncome TaxableNon-PPIncome 2O17/18 $2O,OOO $ O 2018/19 15,000 O 2019/20 25,OOO 3,OOO 2020/21 22,000 13,000 2021/22 16,000 6,000 Assumethattheapplicabletaxratesforeachoftheseyearswerethesameasthosecurrentlyused.
MaxScumbagisaprimaryproducerwhocommencedbusinessin2017/18. Thefollowingdata relatestoMax'sfirstfive yearsoftrading:
Year | Taxad/ePPIncome | TaxableNon-PPIncome |
2O17/18 | $2O,OOO | $ O |
2018/19 | 15,000 | O |
2019/20 | 25,OOO | 3,OOO |
2020/21 | 22,000 | 13,000 |
2021/22 | 16,000 | 6,000 |
- Assumethattheapplicabletaxratesforeachoftheseyearswerethesameasthosecurrentlyused.
Foreachtaxyear,determineMax'seligibilitytoparticipateintheaveraging system.
Foreach applicabletaxyear, calculatethe'gross averaging amount'.For each applicabletaxyear, calculate the averagingadjustment.
Forthe2021/22taxyear,calculateMax's taxpayable.
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Managerial Accounting Tools for business decision making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
5th edition
470506954, 471345881, 978-0470506950, 9780471345886, 978-0470477144
