PBL 1

One of your clients, Corey Hart, is the sole director and sole shareholder of Sunglass World Pty Ltd. The company is a retail store that specialises in selling a range of designer-label high-end sunglasses.

The company is registered for the GST and accounts for the GST on the non-cash (accruals) basis.

The company has three stores - one in the Brisbane CBD, the other in Indooroopilly and the third store in Surfers Paradise on Queensland's Gold Coast.

The company was incorporated in Australia in May 2010. The company had a turnover of $2.4 million in 2019 and is expecting a turnover of approximately $2.6 million for the 2020 financial year. The company is likely to have a taxable income of approximately $160,000 in respect of the year ended 30 June 2020.

Corey informs you that on 17 November 2019, the company acquired a new motor vehicle, a 2019 Mercedes C350 Class Sedan, which was financed via a chattel mortgage agreement.

A copy of the tax invoice for the purchase of the new car is attached for your reference on the following page.

MERCEDES BENZ BRISBANE TAX INVOICE 194 Breakfast Creek Road ABN: 23 004 411 410 Newstead, QD, 4006. MERCEDES SOLD TO: INVOICE NUMBER: 4126 INVOICE DATE: 17 November 2019 Mr Corey Hart ORDER NUMBER: 8633 Sunglass World Pty Ltd SALES REPRESENTATIVE: Mr Michael Sembello 14 Queen Street Brisbane, QLD, 4000. DESCRIPTION AMOUNT * 2019 Mercedes C350 Class Sedan 81,000.00 Colour trim 2,156.50 Seat comfort package 1,872.00 Sunroof 2,448.00 Vision package 1,416.90 Registration fee * 513.50 Compulsory third party (CTP) insurance * 640.18 Dealer delivery charges 4,753.04 Stamp duty 2,912.34 Luxury car tax 2,287.54 Total amount payable (drive away price): $ 100,000.00 Payments received: Hightower Finance Company - chattel mortgage $ 100,000.00 Balance due: $ 0.00