Question 2

The following information is provided by South Pty Ltd (South), a resident private company with an annual turnover of $20 million in the 2016/17 tax year.

2016 $

01.07.16 Opening balance brought forward. Franking surplus 1029

28.07.16 Payment of the last PAYG instalment for the 2015/16 tax year 1000

30.09.16 Receipt of an unfranked dividend from a resident public company 2000

28.10.16 Payment of the first PAYG instalment for the 2016/17 tax year 2100

2017

28.02.17 Payment of the second PAYG instalment for the 2016/17 tax year 2000

15.03.17 Final payment of company tax for the 2015/16 tax year 6550

28.04.17 Payment of the third PAYG instalment for the 2016/17 tax year 2250

28.04.17 Payment of fringe benefit tax 4200

30.05.17 Payment of a fully franked dividend 37 300

30.06.17 Receipt of a dividend from an Australian public company franked 3000

to 75%

Prepare the franking account of South for the 2016/17 franking year and advise the company of its liability for franking deficit tax.