Statement of Advice $1-$ Preparation of a tax return for a partnership taxpayer

Your client Nicole and Sam attended your office to have their $2023-$year tax return prepared.

Nicole Mania & Sam Baker are equal partners of N&S partnership that is in the business of manufacturing shelters for pets. Both have contributed equal amounts of capital. Nicole is a silent partner while Sam spends most of the time working in the partnership business. To reflect the extra time that Sam spends in the business, they have agreed that Sam should receive an annual salary of $$80,000.$ As per the partnership agreement, Nicole and Sam will share partnership profits equally.

The following information was provided by the business.

Sales $$1,000,000$

Cost of Sales $$550,000$

Other expenses $($including Sam's salary and decline in value$)$ $$210,000$

N&S partnership Proceeds from sale of various assets during $2023$

Sale of Qantas shares held as an investment $($a$)$ $$8,900$

Sale of Telstra shares held as an investment $($b$)$ $$7,500$

Sale of land held as an investment $($c$)$ $$120,000$

Sale of business car used for delivering goods $($d$)$ $$19,000$

Further information regarding the disposal of the partnership's assets

a$)$ Qantas shares were purchased on $1$ March $2020$ for $$11,600$

b$)$ Telstra shares were purchased on $22$ November $2022$ for $$2,100$

c$)$ Land was purchased on $8$ May $2010$ for $$70,000$

d$)$ The business car was purchased on $1$ July $2020$ and had an adjustable value of $$10,500$ at the

time of disposal.

Other information: Nicole is also employed by an Australian Bank and earned a total salary of $$70,000.$

Required

$1)$ What is the ITAA$36$ s $90$ net income of the partnership?

$2)$ How much is to be allocated to each partner?

$3)$ What is the taxable income for Nicole and Sam who are equal partners of the N&S partnership?

Statement of Advice $2-$ Calculate the franking account and tax payable by Technical Solutions Pty Ltd$.$

Jerry Seinfeld is a director of Technical Smart Solutions Pty Ltd$,$ an Australian resident private company, with a corporate tax rate for imputation purposes for the $2022/23$ income year of $30\%.$

Jerry provided you with the following information regarding the company's franking account:

Date Transactions Amounts

$1$ July $2022$ Opening balance $$400$

$30$ August $2022$ Tax refund from $2022$ company tax return $$4,500$

$20$ October $2022$ GST paid relating $2022$ financial year $$19,000$

$11$ November $2022$ PAYG instalment paid relating September quarter $$1,300$

$28$ December $2022$ Paid fully franked dividend $$10,000$

$2$ February $2023$ Received fully franked dividend from Australian company $$6,000$

$27$ February $2023$ PAYG instalment paid relating December $$1,300$

$25$ May $2023$ PAYG instalment paid relating March quarter $$1,300$

$28$ June $2023$ Paid unfranked dividend $$10,000$

$(1)$ Benchmark franking percentage for Technical Solution Pty Ltd is $100\%$

$(2)$ Technical Solutions Pty Ltd has a taxable income of $$27,000$ for $2022/23.$

Required

$1)$ Do the GST paid relating $2022$ financial year $($$$19,000)$ on $20$ Oct $2022$ included in franking account?

$1)$ Prepare Technical Solutions Pty Ltd$\text{'}$s franking account for the $2022/23$ tax year $($use the running balance table to complete the franking account Dr and Cr$)$ and explain$/$advise any consequences arising from the franking account balance at $30$ June $2023.$

$2)$ Calculate net tax payable $($refundable$)$ for the company.