The GST rate in Australia is 10%.

Perfect Plants Pty Ltd is a mid-sized wholesale plant nursery based in the western suburbs of Melbourne. As well as their wholesale business they have a small retail operation and propagation facility where they grow a selectnumber of specialistvarieties of orchids. The following financial statements for 2014/15 tax year have been provided. Perfect Plants Pty Ltd Balance Sheet as at 30/6/15 Owner's Equity Capital $ 2,766,000 469,000 3,235,000 350,000 Add: Net Profit Less: Drawings 2,885,000 Assets Current Assets Cash at Bank 200,000 350,000 550,000 Debtors Control 1100,000 Stock Control Non-Current Assets (Fixed Assets) Premises 5,000,000 1,000,000 750,000 Equipment Vehicles 6,750,000 7,850,000 Total Assets Liabilities Current Liabilities Creditors Control 915,000 50,000 GST Clearing 965,000 Non-Current Liabilities Loan XYZ Bank 4,000,000 4,965,000 Total Liabilities Net Assets (Assets less Liabilities) 2,885,000 Perfect Plants Pty Ltd Perfect Plants Pty Ltd Cash Flow Statement for the year ended 30/6/15 Profit and Loss Statement For the year ended 30/6/15 S Cash Flows from Operating Activities $ S Revenue 1,050,000 Retail Cash Sales 1,050,000 Retail Cash Sales Receipts from Debtors Interest Received 4,750,000 Wholesale Credit Sales 5.450.000 10,000 10,000 6,510,000 Interest Received GST Collected 640,000 Less Cost of Sales GST Paid (458,500) (171,500) (2,535,000) Cost of Goods Sold 3,200,000 ATO-GST Settlement 150,000 3,350,000 3,160,000 Cartage Inward Gross Profit Payments to Creditors Wages & Salaries Interest Paid (1,055,000) Less Expenses (200,000) Wages&Salaries 1,055.000 Other Operating Expenses Income Tax Paid (985,000) (201,000) 844,000 200,000 Interest Paid Other Operating Expenses 985,000 Total Cash Flow from Operating Activities Cash Flow from Investing Activities Purchase of Equipment Bad Debts 100,000 Depreciation 150,000 2,490,000 (250,000) (250,000) Total Cash Flows from Investing Activities Net Profit Before Tax 670,000 Cash Flow from Financing Activities Drawings Loan Repayments Total Cash Flows From Financing Activities 201,000 Income Tax Expenses (120,000) Net Profit After Tax 469,000 (350,000) (470,000) 124,000 76,000 200,000 Net Change in Cash Position Opening Bank Balance Closing Bank Balance Use the above information to assist you in answering the following question. You will also be required touse the ATO website to find some of the answers. Where appropriate, provide details of where you found your information and any calculations performed Perfect Plants Pty Ltd use the Cash or Accrual Accou Question their business onerations? Provide a in context explanation &the method response Question 2 Given the business structure of Perfect Plants, find the appropriate Income Tax Rate. Is this the tax rate used above? Question 3 Not every business is required to register for GST. What is the turnover amount that a commercial business is allowed before they must register for GST? Given this, is Perfect Plants required to be registered for GST? Question 4 Not all items are subject to GST. List five sales items that are not subject to GST. Would Perfect Plants be likely to sell any GST free items? Explain your answer. Question 5 To report and pay GST amounts to the ATO, and claim GST credits, a business is required to complete and lodge a report. What is the name of this report? Listthe three ways.of Subaiting this.report Question 6 List5source.documents that.could.be.used by.a business.entity, With reference to legislative requirements explain why it is important to keep accurate records of these documents. Perfect Plants Pty Ltd is a mid-sized wholesale plant nursery based in the western suburbs of Melbourne. As well as their wholesale business they have a small retail operation and propagation facility where they grow a selectnumber of specialistvarieties of orchids. The following financial statements for 2014/15 tax year have been provided. Perfect Plants Pty Ltd Balance Sheet as at 30/6/15 Owner's Equity Capital $ 2,766,000 469,000 3,235,000 350,000 Add: Net Profit Less: Drawings 2,885,000 Assets Current Assets Cash at Bank 200,000 350,000 550,000 Debtors Control 1100,000 Stock Control Non-Current Assets (Fixed Assets) Premises 5,000,000 1,000,000 750,000 Equipment Vehicles 6,750,000 7,850,000 Total Assets Liabilities Current Liabilities Creditors Control 915,000 50,000 GST Clearing 965,000 Non-Current Liabilities Loan XYZ Bank 4,000,000 4,965,000 Total Liabilities Net Assets (Assets less Liabilities) 2,885,000 Perfect Plants Pty Ltd Perfect Plants Pty Ltd Cash Flow Statement for the year ended 30/6/15 Profit and Loss Statement For the year ended 30/6/15 S Cash Flows from Operating Activities $ S Revenue 1,050,000 Retail Cash Sales 1,050,000 Retail Cash Sales Receipts from Debtors Interest Received 4,750,000 Wholesale Credit Sales 5.450.000 10,000 10,000 6,510,000 Interest Received GST Collected 640,000 Less Cost of Sales GST Paid (458,500) (171,500) (2,535,000) Cost of Goods Sold 3,200,000 ATO-GST Settlement 150,000 3,350,000 3,160,000 Cartage Inward Gross Profit Payments to Creditors Wages & Salaries Interest Paid (1,055,000) Less Expenses (200,000) Wages&Salaries 1,055.000 Other Operating Expenses Income Tax Paid (985,000) (201,000) 844,000 200,000 Interest Paid Other Operating Expenses 985,000 Total Cash Flow from Operating Activities Cash Flow from Investing Activities Purchase of Equipment Bad Debts 100,000 Depreciation 150,000 2,490,000 (250,000) (250,000) Total Cash Flows from Investing Activities Net Profit Before Tax 670,000 Cash Flow from Financing Activities Drawings Loan Repayments Total Cash Flows From Financing Activities 201,000 Income Tax Expenses (120,000) Net Profit After Tax 469,000 (350,000) (470,000) 124,000 76,000 200,000 Net Change in Cash Position Opening Bank Balance Closing Bank Balance Use the above information to assist you in answering the following question. You will also be required touse the ATO website to find some of the answers. Where appropriate, provide details of where you found your information and any calculations performed Perfect Plants Pty Ltd use the Cash or Accrual Accou Question their business onerations? Provide a in context explanation &the method response Question 2 Given the business structure of Perfect Plants, find the appropriate Income Tax Rate. Is this the tax rate used above? Question 3 Not every business is required to register for GST. What is the turnover amount that a commercial business is allowed before they must register for GST? Given this, is Perfect Plants required to be registered for GST? Question 4 Not all items are subject to GST. List five sales items that are not subject to GST. Would Perfect Plants be likely to sell any GST free items? Explain your answer. Question 5 To report and pay GST amounts to the ATO, and claim GST credits, a business is required to complete and lodge a report. What is the name of this report? Listthe three ways.of Subaiting this.report Question 6 List5source.documents that.could.be.used by.a business.entity, With reference to legislative requirements explain why it is important to keep accurate records of these documents