QUESTION 2 Kirsty is a professional hairdresser specialising in training apprentice hairdressers. She is registered for GST on an invoice basis with a two-month return period. In the 2 months of February and March 2019, Kirsty spent the following sums (all amounts included GST, if any): Hair products bought from Hot Head NZ Ltd (1) Special hair straightening tongs imported from USA An antique barber's chair (2) Petrol, running expenses and repairs to her scooter (3) A new computer for keeping automated business accounts (4) Purchase of iPod (5) Cash paid to new apprentice for casual labour Bank fees on business bank account New apron to protect her clothes when she is dying hair Comfortable shoes for standing all day Rental of salon (6) Estimated depreciation on her scooter Repair of scooter (7) $1,200 $800 $1,600 $580 $1,100 $399 $220 $12 $150 $150 see note $60 $30 During the same period Kirsty earned the following sums (all amounts include GST, if any): Fees for teaching at night school (8) $170 Trade discount refund from Hot Head NZ Ltd $420 Invoices issued for hair dressing (9) $9,100 Department of Social Welfare (10) $1,500 Invoices issued for hair products sold (including mark-up of 15%) $1,900 Invoice issued for hair care advice given over phone (11) $70 Hair dressing performed but not yet billed $540 Hair products sold but not yet billed Advance payment (12) $300 $710 $480 Retainer fee (13) Interest on business bank account $19 Notes: (1) These supplies included $90 of hair gel that Kirsty takes home for her own personal use. (2) Kirsty bought the antique chair for her salon. She purchased it from a barber who retired years ago. She has paid a $500 deposit and will pay the remaining $1,100 in October 2019. (3) Kirsty uses the scooter for getting to and from work as well as for personal use. (4) The computer was purchased on Hire Purchase in January 2019 for $5,000. Under the HP agreement Kirsty has to make 10 monthly payments of $550. (5) Kirsty downloads music to her phone App so she can play it for clients in her salon. (6) Kirsty's rent is $900 per month. In January, Kirsty paid $2,700 covering the 3 months from January to March 2019. In March, she paid another $900 for April 2019. (7) Kirsty took her scooter to the mechanic in February and had been quoted $190 for repairs. However, the mechanics fianc is one of Kirsty's clients so the mechanic agreed to charge her only $30 for parts and do the repairs for free if she would do the fiance's hair for free for the wedding in March. (8) Kirsty is employed to teach beauty therapy evening classes at a local school. (9) The fees were invoiced in February and March but so far only $7,000 has been received. $900 worth was invoiced to a US modelling agency that needed Kirsty to do the hair for two Australian models flown to New Zealand for a weekend fashion shoot. Kirsty was told in late March that an invoice issued for $300 will not be recovered as that client has fled to Australia to avoid bankruptcy. (10) Kirsty is part of the "Work Ready" scheme under which the Department of Social Welfare pays her a grant to teach unemployed women how to best present themselves at job interviews. (11) One of Kirsty's former clients, who now lives in Australian, had a hair disaster while attending a wedding in February. The client sought Kirsty's advice over the phone, for which Kirsty charged her. (12) One client has always been late paying her bills. So this time, when she made an appointment for October 2019, Kirsty insisted on getting some payment in advance. As the work has not yet been done, no invoice has been issued. (13) Kirsty provides advice to the up-coming New Zealand Miss World Beauty Pageant. She is paid a retainer fee to make sure she is available for the entire week of the pageant in April 2020. Required Prepare Kirsty's GST return for the period ending 31 March 2019. Include all relevant sums and exclude any irrelevant items. Briefly explain (using sections or cases where appropriate) why you have included or excluded those items. QUESTION 2 Kirsty is a professional hairdresser specialising in training apprentice hairdressers. She is registered for GST on an invoice basis with a two-month return period. In the 2 months of February and March 2019, Kirsty spent the following sums (all amounts included GST, if any): Hair products bought from Hot Head NZ Ltd (1) Special hair straightening tongs imported from USA An antique barber's chair (2) Petrol, running expenses and repairs to her scooter (3) A new computer for keeping automated business accounts (4) Purchase of iPod (5) Cash paid to new apprentice for casual labour Bank fees on business bank account New apron to protect her clothes when she is dying hair Comfortable shoes for standing all day Rental of salon (6) Estimated depreciation on her scooter Repair of scooter (7) $1,200 $800 $1,600 $580 $1,100 $399 $220 $12 $150 $150 see note $60 $30 During the same period Kirsty earned the following sums (all amounts include GST, if any): Fees for teaching at night school (8) $170 Trade discount refund from Hot Head NZ Ltd $420 Invoices issued for hair dressing (9) $9,100 Department of Social Welfare (10) $1,500 Invoices issued for hair products sold (including mark-up of 15%) $1,900 Invoice issued for hair care advice given over phone (11) $70 Hair dressing performed but not yet billed $540 Hair products sold but not yet billed Advance payment (12) $300 $710 $480 Retainer fee (13) Interest on business bank account $19 Notes: (1) These supplies included $90 of hair gel that Kirsty takes home for her own personal use. (2) Kirsty bought the antique chair for her salon. She purchased it from a barber who retired years ago. She has paid a $500 deposit and will pay the remaining $1,100 in October 2019. (3) Kirsty uses the scooter for getting to and from work as well as for personal use. (4) The computer was purchased on Hire Purchase in January 2019 for $5,000. Under the HP agreement Kirsty has to make 10 monthly payments of $550. (5) Kirsty downloads music to her phone App so she can play it for clients in her salon. (6) Kirsty's rent is $900 per month. In January, Kirsty paid $2,700 covering the 3 months from January to March 2019. In March, she paid another $900 for April 2019. (7) Kirsty took her scooter to the mechanic in February and had been quoted $190 for repairs. However, the mechanics fianc is one of Kirsty's clients so the mechanic agreed to charge her only $30 for parts and do the repairs for free if she would do the fiance's hair for free for the wedding in March. (8) Kirsty is employed to teach beauty therapy evening classes at a local school. (9) The fees were invoiced in February and March but so far only $7,000 has been received. $900 worth was invoiced to a US modelling agency that needed Kirsty to do the hair for two Australian models flown to New Zealand for a weekend fashion shoot. Kirsty was told in late March that an invoice issued for $300 will not be recovered as that client has fled to Australia to avoid bankruptcy. (10) Kirsty is part of the "Work Ready" scheme under which the Department of Social Welfare pays her a grant to teach unemployed women how to best present themselves at job interviews. (11) One of Kirsty's former clients, who now lives in Australian, had a hair disaster while attending a wedding in February. The client sought Kirsty's advice over the phone, for which Kirsty charged her. (12) One client has always been late paying her bills. So this time, when she made an appointment for October 2019, Kirsty insisted on getting some payment in advance. As the work has not yet been done, no invoice has been issued. (13) Kirsty provides advice to the up-coming New Zealand Miss World Beauty Pageant. She is paid a retainer fee to make sure she is available for the entire week of the pageant in April 2020. Required Prepare Kirsty's GST return for the period ending 31 March 2019. Include all relevant sums and exclude any irrelevant items. Briefly explain (using sections or cases where appropriate) why you have included or excluded those items