Videen Pty Ltd is an Australian resident private company. All the shares in Videen Pty Ltd are owned by Ellie.

During the year ended 30 June 2020 the following events occurred in relation to Videen Pty Ltd

1 July 2019 Opening balance of franking account $100,000

2 July 2019 Payment of dividend franked to 70% $1,600,000

28 October 2019 Payment of income tax for Videen Pty Ltd $600,000

26 November 2019 Receipt of dividend from another company

franked to 80% $450,000

31 December 2019 Refund of income tax for Videen Pty Ltd $750,000

22 February 2020 Receipt of dividend from another company

franked to 50% $430,000

2 March 2020 Payment of dividend franked to 30% $600,000

31 March 2020 Payment of income tax for Videen Pty Ltd $250,000

2 April 2020 Payment of fully franked dividend $800,000

4 April 2020 Payment of NSW State Land Tax $50,000

30 June 2020 Payment of dividend franked to 40% $650,000

Required:

For the year ended 30 June 2020:

1. Prepare the franking account for Videen Pty Ltd. (5 Marks)
2. Calculate the over franking tax (if any) that Videen Pty Ltd is liable to pay (5 Marks)
3. Calculate the franking deficit tax (if any) that Videen Pty Ltd is liable to pay (5 Marks)

You must give reasons for your answer. If relevant, you must show your calculation. You must apply the law to the facts and provide YOUR OWN analysis of the issues