Question
Statement of Advice 3 - Calculate the franking account and tax payable by Smart Solutions Pty Ltd. George Costanza is a director of Smart Solutions
Statement of Advice 3 - Calculate the franking account and tax payable by Smart Solutions Pty Ltd.
George Costanza is a director of Smart Solutions Pty Ltd, an Australian resident private company, with a corporate tax rate for imputation purposes for the 2021/22 income year of 25%.
George provided you with the following information regarding the company's 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 Smart Solution Pty Ltd is 100%
(2) Smart Solutions Pty Ltd's final PAYG instalment for June quarter 2022 totalled $1,300 and this will be paid by 25 August 2022.
(3) Smart Solutions Pty Ltd has a taxable income of $27,000 for 2021/22.
Required
1) Prepare Smart Solutions Pty Ltd's franking account for the 2021/22 tax year and explain/advise any consequences arising from the franking account balance at 30 June 2022.
2) Calculate net tax payable (refundable) for the company.
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