Question
Tom provided his employee with a car on 1 April 2019 which was purchased on 1 October 2015 for $64,000. The car was provided to
Tom provided his employee with a car on 1 April 2019 which was purchased on 1 October 2015 for $64,000.
The car was provided to the employee for the whole year. The operating cost of the car were:
Repairs - $5,000
Road tax - $6,100
Depreciation - $900
Insurance on car - $200
The employee contributed $150 per month. The car traveled 44,000km out of which 15,000km was for business.
(a) Determine FBT using operating cost and statutory cost method and advise which method is preferred.
(b) Discuss why employee contribution has to be deducted from taxable value.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started