Statement of Advice 3 - Calculate the franking account and tax payable by Haufmann Pty Ltd.

Jerry Haufmann is a director of Haufmann Pty Ltd, an Australian resident private company, with a corporate tax rate for imputation purposes for the 2021/22 income year of 25%.

Frank provided you with the following information regarding the companys franking account:

Date Transactions Amounts

1 July 2021 Opening balance $2,400

30 August 2021 Tax refund from 2021 company tax return $4,500

20 October 2021 PAYG instalment paid relating June quarter 2021 $1,900

11 November 2021 PAYG instalment paid relating September quarter 2021 $1,300

28 December 2021 Paid fully franked dividend $10,000

2 February 2022 Received fully franked dividend from Australian company $6,000

27 February 2022 PAYG instalment paid relating December quarter 2021 $1,300

25 May 2022 PAYG instalment paid relating March quarter 2022 $1,300

28 June 2022 Paid 60% franked dividend $10,000

Other information

(1) Benchmark franking percentage for Haufmann Pty Ltd is 100%

(2) Haufmann Pty Ltds final PAYG instalment for June quarter 2022 totalled $1,300 and this will be paid by 25 August 2022.

(3) Haufmann Pty Ltd has a taxable income of $27,000 for 2021/22.

Required

1) Prepare Haufmann Pty Ltds franking account for the 2021/22 tax year and explain/advise any consequences arising from the franking account balance at 30 June 2022. You must include relevant section numbers

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

Expert Answer

This solution was written by a subject matter expert. It's designed to help students like you learn core concepts.

Step-by-step

1st step

All steps

Answer only

Step 1/2

ANSWER:

According to collect from the data

Let us assume that the data as followed by

a. Franking account: 1 July 2021 opening balance $2,400 30 August 2021 Tax refund from 2021 company official document $4,500 20 October 2021 PAYG instalment paid relating June quarter 2021 $1,900 11 November 2021 PAYG instalment paid relating September quarter 2021 $1,300 28 December 2021 Paid absolutely franked dividend $10,000 2 February 2022 Received absolutely franked dividend from Australian company $6,000 27 February 2022 PAYG instalment paid relating December quarter 2021 $1,300 25 could 2022 PAYG instalment paid relating March quarter 2022 $1,300 28 June 2022 Paid hour franked dividend $10,000 Total $40,200

Explanationfor step 1

At 30 June 2022, the franking account balance is in deficit by $2,400. this implies that the corporate won't be ready to frank any future dividends till the account is in credit.

Step 2/2

b.

The company's ratable financial gain for the 2021/22 fiscal year is $27,000. The company's tax collectible for the year is thus $6,750 (25% of $27,000). the corporate has received $4,500 in tax refunds and has paid $9,600 in tax instalments, leading to a internet tax collectible (refundable) of $1,350 for the 2021/22 fiscal year.

Explanationfor step 2

Taxable financial gain is that the quantity of financial gain that's subject to tax. The calculation of rateable financial gain depends on the legal system of the country within which the financial gain is attained. In most cases, rateable financial gain includes all types of financial gain, like wages, salaries, interest, dividends, and capital gains. rateable financial gain is very important as a result of it's the quantity of financial gain on that tax is calculated. the quantity of tax that an individual owes depends on their rateable financial gain. the upper an individual's rateable financial gain, the a lot of tax they're going to owe. internet tax collectible is that the quantity of tax that an individual owes once deductions and credits are taken into consideration. cyber web tax collectible is that the quantity of tax that's truly owed, and it's the quantity that has got to be paid to the govt.. cyber web tax collectible is calculated by subtracting deductions and credits from the whole tax owed. Deductions square measure amounts which will be ablated from an individual's financial gain to scale back their rateable financial gain. Credits square measure amounts which will be ablated from the tax owed. Deductions and credits will cut back the quantity of tax that an individual owes. they'll additionally build the legal system a lot of progressive, which implies that individuals with higher financial gains pay a better share of their income in taxes. cyber web tax collectible is that the quantity of tax that an individual truly owes. it's the quantity that has got to be paid to the govt..

Final answer

a.

At 30 June 2022, the franking account balance is in deficit by $2,400. This means that the company will not be able to frank any future dividends until the account is in credit.

b.

The company's taxable income for the 2021/22 financial year is $27,000. The company's tax payable for the year is therefore $6,750 (25% of $27,000). The company has received $4,500 in tax refunds and has paid $9,600 in tax instalments, resulting in a net tax payable (refundable) of $1,350 for the 2021/22 financial year

total 40200 came from where?? and show me franking account in dr and cr table.. so that i can easily understand.