TAXA$2000$ Introduction to Australian Taxation Law

The $6-$year loan was used to purchase the commercial

units. Borrowing expenses had totalled $$5,400$ and had

been paid on $1$ June $2022.$ Interest on the loan was

$$2,500$ per month, payable on the first day of each month.

Interest was paid monthly until $1$ February when interest

was prepaid for $12$ months.$|$

Notes:

The company was established $7$ years ago by Mr House and his friend Mr Flat

owning all the shares jointly. Last year Mr House became ill and sold his $50\%$

shareholding to Mr Loft.

Included in the wages and salaries is an amount of $$50,000$ paid to Mr House's

wife. Mrs House spends $2$ hours a day in the office doing general office duties. The

Commissioner considers that $$15,000$ would be reasonable.

The company has capital losses of $$17,620$ carried forward from the $2022$ year.

The company paid the following PAYG $($Instalments$)$ during the year:

According to its dividend policy it paid $2$ dividends on $1$ December $2022$ and $1$ June

The first dividend was $$92,840$ and was franked to $75\%$ while the second

dividend was $$100,000$ and was franked to $100\%.$ The opening balance in the

franking account was a credit of $$3,000.$

Required:

Calculate the taxable income and net primary tax payable for the

year ended $30$ June $2023$ assuming they are classified as a BRE.

The company wanted to use the SBE concessions where available.

Prepare the franking account for the current year, and calculate any

tax and$/$or penalty payable.