Q13.

James operates a business "The Daily Grind" specialising in coffee machine repairs and some sales of coffee related goods. The business premises also has a small cafe where he sells coffee to the public. The business has an ABN (28 096 278 581) and is registered for GST. You have previously advised him that the business qualifies for SBE concessions, and several were used in prior years including the SBE concessions for depreciation and for trading stock. As the business has used cash based accounting in prior years the tax return is to be prepared using this method.

The Daily Grind's depreciable assets have previously been allocated to a general small business pool. The balance of this pool as at 1 July 2020 is $32,000. During the year ended 30 June 2021 the following business assets were purchased:

Description	Original Cost ($)	Taxable Purpose %
Rancilio Classe 10 (coffee machine for use in caf)	$33,500	100%
Mazzer Super Jolly Auto Grinder (grinder for use in caf)	$990	100%
Service van (motor vehicle, used partly for business purposes)	$43,000	50%

a) Calculate the General SBE Pool deduction for year ended 30 June 2021 and the closing balance of the General SBE pool at 30 June 2021.

General SBE Pool

Opening Balance

+ additions

- disposals

- depreciation

15%

30%

= Closing Balance

James's records show that the following income was earned and expenses incurred for the financial year (note all amounts shown are GST exclusive):

$

Repairs income - (cash receipts) 80,500

Caf income - (cash receipts) 38,000

$118,500

Advertising 5,600

Accounting fees 600

Bank fees 378

Insurance - business 870

Purchases 2,750

Licences & fees 7,950

Telephone - Mobile (100% business use) 1,640

Interest on business loan 1,500

Total expenses $21,288

Additional information:

Trading stock at 30 June 2020 4,000

at 30 June 2021 6,000

Assets purchased Refer to Question 13, Part A for depreciation to be claimed

b) Calculate the Taxable Income for James attributable to his business Daily Grind for the year ended 30 June 2021. Show your calculations below.

Assessable Income

- Allowable Deductions

= Taxable Income