Nice Car Pty Ltd runs a business selling car accessories. During the quarter ended 30 June 2021, they had the following transactions:
                                                                                                                                            $
Bank interest received                                                                                               218
Sale of car accessories                                                                                      218,600
Purchase of car accessories                                                                               56,400
Cleaning services paid to clean premises                                                          2,350
Wages paid to employees                                                                                   62,100
Bank fees paid                                                                                                            480

i)             Required:
Calculate Nice Car’s GST liability for the quarter. Assume that they are GST registered and all figures are GST inclusive, where applicable. Show all working. 5 marks                                                               

One of your clients is a firm of architects established under a partnership by four partners. On 1 July 2020 the partnership borrowed $140,000 in order to pay each partner $35,000. This reduced their respective partners’ accounts to $0 owing to each partner. Two of partners spent the money on their private mortgages and the other two bought cars for private use.

ii)            Required:
With reference to relevant case law, briefly discuss whether the partnership would be entitled to an income tax deduction with respect to interest paid on the amount borrowed. 3 marks