Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Megan incurs the following expenditure during the 2 0 2 3 income year: She pays $ 3 0 , 0 0 0 for alpaca food.

Megan incurs the following expenditure during the 2023 income year:
She pays $30,000 for alpaca food.
She pays for the alpaca food using her credit card. She pays $1,500 in interest to the credit card company for the purchase.
She receives an $800 speeding fine on the way to Melbourne to attend a fashion show where the models were wearing clothing made from the wool of Megan's alpacas. Megan has a stall at the fashion show where she displayed the alpaca wool from her farm.
On 1 May 2023, she buys a laptop, costing $3,000. The Commissioner states that the laptop has an effective life of three years. She uses the laptop 75% for her employment and the rest of the time for streaming Netflix.
She travels from her home at Nicholls to the farm at Lake George on Friday afternoons, returning on the following Sunday night, by taxi, at an annual cost of $5,000.
She pays the shearer $24,000 each year to shear the alpacas. He is not an employee.
Megan is thinking about starting a new business selling her alpacas for meat. She asks her accountant to investigate the feasibility of the business before she decides. The accountant's report cost $4,000. Megan decides not to start the business.
Megan decides that she needs to improve her skills farming alpacas. She travels to the United States for 4 weeks to study alpaca farming techniques. She spends 3 weeks travelling around California visiting alpaca farms discussing the latest techniques. She then spends a week visiting wineries in the Napa Valley area of California on a food and wine tour with friends. The total cost of trip (airfares and accommodation) was $16,000.
Required:
Using legislation and case law, explain the GST implications of the transactions relating to the alpaca keeping activity to Megan arising in the 2023 financial year, and whether a GST liability or an input tax credit will arise (including the amount). Assume that all entities are registered for GST. All amounts are GST-inclusive (where applicable). Do not calculate the net amount for the purpose of the section 17-5 of the GST Act. Do not consider the GST consequences of Megan's building activity or the dividends.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Principles Of Auditing

Authors: Hugo Romero

1st Edition

1632409372, 978-1632409379

More Books

Students also viewed these Accounting questions

Question

5. Identify three characteristics of the dialectical approach.

Answered: 1 week ago