On 1 April 2019 Stay at Home Ltd, a home dcor company provided a car to Chanuka (employee). Chanuka takes the car with him every day and parks it in his garage at night. He has received the car as part of his salary package. It cost the company $39,000. The total monthly cost, including the lease and other running costs (GST inclusive), is $1,520 per month. Chanuka contributed $50 per month to contribute to the monthly costs.

During the FBT year ended 31 March 2020 (365 days), Chanuka traveled 26,000 km, of which 15600 km were for the business purpose.

Required:

Analyze and explain the above situation for the car fringe benefit provided by Stay at Home Ltd. Assume that Stay at Home Ltd maintained a logbook for 12 weeks for the car.

Stay at Home Ltd likes to apply both the Statutory and the cost method to identify an option that will give them less tax liability. Therefore, in your analysis, you are required to use both the methods and choose the suitable one to calculate the FBT for Stay at Home Ltd