Q: calculate Tax income of Baby Hub

1. Trust distribution: 10% of assessable or taxable income?

2. how to calculate franking credit of Jumbuck Bank and Toy Best?

3. is legal fee deductiable in this case?

5:567 ..il 4G Expert Q&A Done Opening Purchases Closing stock during year stock $210,000 $510,000 $260,000 $160,000 $610,000 $510,000 Toy A Toy B Sales during the year were $700,000 (Toy A) and $350,000 (Toy B). Of the sales, $150,000 represented invoices issued in the month of June 2021 for which payment had not been received as at 30 June 2021. Other income received by Baby Hub for the year included: A dividend of $100,000 received from Jumbuck Bank Ltd (an Australian resident public company for tax purposes) franked to 50%. An unfranked dividend of $50,000 from Toy Best Ltd (an Australian resident public company for tax purposes) . A non-portfolio dividend of $60,000 from Baby Hub Can Ltd, Baby Hub's wholly owned subsidiary resident in Canada. The non-portfolio divided of $60,000 was non-assessable non-exempt income to Baby Hub Pty Ltd under ITAA 1936 s23AJ. Baby Hub also holds 10 units in the Toddler Toy Unit Trust. Under the terms of the unit trust Baby Hub is entitled to distributions of 10% of the income of the unit trust. The income of the trust estate for the year ended 30 June 2021 was $220,000, and the net income of the trust estate was $200,000. Salaries for Baby Hub staff for the year were $120,000. Other deductible expenses for the year were $150,000. Unfortunately, during the year, a child suffers an eye injury whilst playing with Toy B, and Baby Hub is sued as a result. Baby Hub is denying liability, but so far has incurred $25,000 in legal fees. As at 30 June 2021, the lawsuit has not been settled. Due to the bad publicity 5:567 ..il 4G Expert Q&A Done Opening Purchases Closing stock during year stock $210,000 $510,000 $260,000 $160,000 $610,000 $510,000 Toy A Toy B Sales during the year were $700,000 (Toy A) and $350,000 (Toy B). Of the sales, $150,000 represented invoices issued in the month of June 2021 for which payment had not been received as at 30 June 2021. Other income received by Baby Hub for the year included: A dividend of $100,000 received from Jumbuck Bank Ltd (an Australian resident public company for tax purposes) franked to 50%. An unfranked dividend of $50,000 from Toy Best Ltd (an Australian resident public company for tax purposes) . A non-portfolio dividend of $60,000 from Baby Hub Can Ltd, Baby Hub's wholly owned subsidiary resident in Canada. The non-portfolio divided of $60,000 was non-assessable non-exempt income to Baby Hub Pty Ltd under ITAA 1936 s23AJ. Baby Hub also holds 10 units in the Toddler Toy Unit Trust. Under the terms of the unit trust Baby Hub is entitled to distributions of 10% of the income of the unit trust. The income of the trust estate for the year ended 30 June 2021 was $220,000, and the net income of the trust estate was $200,000. Salaries for Baby Hub staff for the year were $120,000. Other deductible expenses for the year were $150,000. Unfortunately, during the year, a child suffers an eye injury whilst playing with Toy B, and Baby Hub is sued as a result. Baby Hub is denying liability, but so far has incurred $25,000 in legal fees. As at 30 June 2021, the lawsuit has not been settled. Due to the bad publicity