Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tom and Kate are about to open their optometry store, Sight Pty Ltd, on 1 August 2021. They host an opening party where a guest

Tom and Kate are about to open their optometry store, Sight Pty Ltd, on 1 August 2021. They host an opening party where a guest will receive a "lucky door prize," which is a bottle of alcohol, valued at $176 including GST.

They seek your advice as to the:

i) accounting consequences and

ii) income tax consequences

of the transaction.

In your answer, please include the exact amount that will be included in the Profit and Loss Statement and the Balance Sheet of Perfect Vision Pty Ltd for the year ended 30 June 2022; and exactly how much will be tax-deductible (if any) in the company's 2022 income tax return. Please ignore any fringe benefits tax (FBT) consequences.

All calculations must be rounded to the nearest dollar using the correct number of days from the date of the transaction to 30 June 2022.

Please use 365 days for all calculations.

briefly refer to appropriate references (ie. AASB Accounting Standards, sections of the ITAA (1936) and/or ITAA (1997) and relevant taxation rulings (including Taxation Ruling TR 2021/3).

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And EDP Objective Questions And Explanations

Authors: Irvin N Gleim, William A. Hillison

4th Edition

0917537432, 978-0917537431

More Books

Students also viewed these Accounting questions