Question $4$

QN Ltd was a mining company based in Australia. Because of financial difficulties it ceased operations and went into liquidation.

During the year before its liquidation QN Ltd made the following payments:

$1.$ A sum of $$10,000,000$ given to a political party.

$2.$ A payment to the company solicitors of $$50,000$ to defend action against the company for breaching Environmental Protection issues.

$3.$ The company was eventually fined $$75,000$ for the above breaches.

$4.$ A salary of $$125,000$ to the wife of the Managing Director of the company for acting as the bookkeeper. His wife is not a qualified accountant and only spends $1$ hour a day in the office. A reasonable salary for this role based on the hours worked would be $$28,000.$

$5.$ A claim for faulty products that was paid after the company ceased operations of $$958,000$

REQUIRED: Advise the company whether the above amounts are allowable deductions. In your answer you must refer to relevant case law and legislation.