Question 1

Calibri Pty Ltd run by Dusty Springfield conducts a ladies cosmetics online store as is considering employing her first assistant to help with the posting and packaging of orders.

Prepare budgets in accordance with income and expenditure forecasts, and periodically review to ensure accuracy of tax obligation estimates.

Estimates are provided in the following table: a) Complete the cash budget with the projected cash position after 4 months using the instalment income method, for working out the PAYG instalment.

HINT: Work out the amount of each PAYG instalment and then insert it in the correct month and then total up, and comment on the cash flow situation.

b) You should also use the alternative method (instalment income x instalment rate method) to calculate the PAYG instalment.

Notes:.

Their notional tax is $20,000 for the year. Their instalment rate is 5%. They do not wish to have any variations to either the notional tax or the instalment rate.