FNS60217 Advanced Diploma of Accounting
Assessment Type Assessment -01 (Case Study and Short Questions Answer) Time allowed
Due Date Location AHIC Term / Year
Unit of Competency
National Code/Title FNSACC601 Prepare and administer tax documentation for legal entities
Student Name Student ID
Student Declaration: I declare that the work submitted is my own, and has not been copied or plagiarised from any person or source. Signature: ____________________________
RESULTS (Please Circle) SATISFACTORY NOT SATISFACTORY
Feedback to student:
Student Declaration: I declare that I have been assessed in this unit, and I have been advised of my result. I am also aware of my appeal rights.
Assessor Declaration: I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I have provided appropriate feedback.
Instructions to the Candidates
? This assessment is to be completed according to the instructions given below in this document.
? Should you not answer the tasks correctly, you will be given feedback on the results and gaps in knowledge. You will be entitled to one (1) resubmit in showing your competence with this unit.
? If you are not sure about any aspect of this assessment, please ask for clarification from your assessor.
? Please refer to the College re-submission and re-sit policy for more information.
? If you have questions and other concerns that may affect your performance in the Assessment, please inform the assessor immediately.
? To be deemed competent for this unit you must achieve a satisfactory result with tasks of this assessment along with a satisfactory result for the other assessment (Project)
? There are two sections in this assessment.
? This is an Open book assessment which you will do in your own time but complete in the time designated by your assessor. Remember, that it must be your own work and if you use other sources then you must reference these appropriately.
? Resources required completing the assessment tasks are Learner guide, PowerPoint presentation, Unit Assessment Pack (UAP), Access to other learning materials such as textbooks, Access to a computer, the Internet and word-processing system such as MS Word.
? Submitted document must follow the given criteria. Font must be Times New Roman, Font size need to be 12 and line spacing has to be Single line.
? This is Individual Assessments. Once you have completed the assessment, please upload the softcopy of the Assessment into AHIC Moodle.
? Plagiarism is copying someone elseâ€™s work and submitting it as your own. Any Plagiarism will result in a mark of Zero.
ASSESSMENT TASK 1: CASE STUDY
The Assessment Task is due on the date specified by your assessor. Any variations to this arrangement must be approved in writing by your assessor.
Submit this document with any required evidence attached. See specifications below for details.
Please read the following instructions carefully
â€¢ This assessment is to be completed according to the instructions given by your assessor.
â€¢ Feedback on each task will be provided to enable you to determine how your work could be improved. You will be provided with feedback on your work within 2 weeks of the assessment due date. All other feedbacks will be provided by the end of the term.
â€¢ Should you not answer the questions correctly, you will be given feedback on the results and your gaps in knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be deemed competent for this unit of competency.
â€¢ If you are not sure about any aspects of this assessment, please ask for clarification from your assessor.
Please refer to the College re-assessment and re-sit policy for more information.
Case 1: Discretionary Family Trust
Steve formed a Discretionary Family Trust some years ago in favour of his children. The children are:
? Gillian, aged 25, and married;
? Jeff, aged 23, certified insane and is confined to institution;
? Simon, aged 19, a university student;
? Louis, aged 16, s secondary student;
? Boris, aged 4.
The trust deed states that Gillian and Jeff are each entitled to 20% of the trust income.
Simon and Louie each have an entitlement to 25% of the trust income which is to be accumulated until they reach 21 years of age. Simon has a vested and indefeasible interest in his share, but Louiseâ€™s entitlement is contingent upon her surviving until age 21.
Bories does not have a fixed percentage entitlement, but the Trustee has discretionary power to make payments out of trust income for the benefits of Boris. The remaining of the income is retained to accumulate in the trust.
During the year the trustee exercise their discretionary authority and paid $7,000 medical expenses on Borisâ€™s behalf.
The gross income of the trust was $123,000, and deductible expenditure relating to that income was $3,000.
Also, Simon derived $5,700 gross wages (PAYG withheld $800) during university vacations.
For the current year of income calculate the following:
(a) s. 95 net trust income
(b) The share applicable to each beneficiary
(c) Tax Payable by each beneficiary and/or the trustee.
Case 2: Calculation of s.90PNI/Distribution Statement
The partners records of Mathew and John showed accounting net profit for the year of income of $50,000. The detailed partnership P&L is as follows:
Sales Revenue $ 97,000.00
Less: COGS $ 20,000.00
Gross Revenue $ 77,000.00
Salaries $ 20,000.00
Interest $ 7,000.00
Total Expenses $ 27,000.00
Net Accounting Income / (Loss) $ 50,000.00
The partnership agreement provided that profits and losses are to be shared equally.
â€¢ Partnership salaries: Mathew $10,000 and John$10,000
â€¢ Interest paid on capital â€“ John $2,000
â€¢ Interest paid on advance â€“ Mathew $4,000
â€¢ Interest paid on drawings â€“ John $1,000
â€¢ Calculate s.90 partnership net income
â€¢ Prepare a Distribution Statement
â€¢ Calculate assessable income for each partner
Case 3: Tax Losses Carry forward Scheme
During the financial year ended 30 June 201X, XYZ Pty Ltd (XYZ) receives a fully franked dividend of $210. XYZ has allowable deductions of $600 and net exempt income of $80. In addition, the company makes a gift of $50 cash to a Sydney-based public hospital which is deductible under the gift provisions.
The donation, which would generally be allowed as a deduction, cannot contribute towards a
tax loss (s. 26-55); therefore, it cannot be deducted.
(Assume company tax rate is 30%)
Calculate the tax loss under s. 36-55(2) following a four-step method statement.
Case 4: R&D Tax Offset â€“ Smaller Company (Turnover under $20m)
Bil Laboratories Pty Ltd incurred an accounting net loss of $50,000 for the year ended 30 June 201X. This comprised income $500,000, eligible R&D expenses of $100,000 and other expenses $450,000.
(Assume company tax rate is 30% and R&D refundable tax offset is 43.5%)
Calculate taxable income and tax payable / (refundable).
Case 5: Calculation of company tax instalments
For the year ended 30 June 201X, the latest tax return information of Rome Promotion Pty Ltd is as follows:
Item Amount $$
Gross Sales 90,000
Total Income 100,000
Less: Allowable Deductions -80,000
Taxable Income / (Loss) 20,000
Tax payable was $20,000 x 30% = $6,000
Instalment Income for the September quarter 201X was $30,000
Calculate the instalment rate and PAYG instalment amount for the September quarter 201X.
(Assume company tax rate is 30%)
Case 6: Tax avoidance
What is the difference between tax minimisation and tax avoidance? Give example for each.
Case 7: CGT- Shares and Personal Use Assets
Assets Cost $ Purchase Date Proceeds
Shares in AmberLtd 1,000 20/09/84 32,000 02/08/12
Shares in Angela Ltd 4,000 20/06/12 1,500 13/11/12
Boat 14,400 21/10/07 15,500 13/11/12
Violin 1,200 15/02/08 1,800 20/11/12
Shares in Louise Ltd 2,200 15/10/12 12,000 26/06/13
Calculate Johnâ€™s net capital gain for the year ended 30 June 2013.
Case 8: Franked and Unfranked Dividends
Libby invested in shares and received the following dividends for 2017/2018.
04/9/17 F/S Ltd Fully franked dividend amount received 3,300
19/12/17 Back Ltd Unfranked dividend 1,750
Calculate her assessable income for the financial year ended 30 June 2018.
(Assume company tax rate is 30%)
Case 9: Tax Return Checklist
In Australia, our financial year runs from 01 July to 30 June. At the end of the financial year we are required to lodge the income tax return. It is a mandatory requirement for every individual and non-individual as long as they have hold a Tax File Number (TFN). Depending on the size and type of entity, we are required to compile certain information before we can prepare and submit our tax returns.
Assume you are an individual and have employment income for full financial year. By profession you are an external auditor and have adequate knowledge of income tax for individuals. Your friend Martin has asked you to do his tax return and requested you to provide him with a checklist. Martin is a civil engineer and he commutes all the times for work.
Prepare a list of the documents (checklist) for Martin considering all the documents / information you will require to finalise his tax return.
Assessment Task â€“ 2 Short-Answer Questions
Question 1 â€“ same example as in case 1, except in this case, the client has no receipts to substantiate the claim. You inform your client likewise that the claim is not allowable and in any case, because there are no receipts to substantiate the claim, it should not be claimed. Your client swears that the expenses were incurred but it was simply -cash in the hand-. Your client instructs you to make the claim.
Question 2 â€“ Same scenario as in (2) and (3), your client states quite openly that no expenses for child care were incurred. Nevertheless, your client instructs you to make the claim. What is the agentâ€™s responsibility?
Question 3 â€“ A client for whom you have prepared the current tax return approaches you for as advice and support for an audit covering the last five returns. You were not involved in the preparation of the previous tax return. But you know that client is registered for GST as well as require to lodge PAYG annual summary report for employees. You also are aware of that client had capital gain in last financial year. What advice will you provide and what support will you give?
4.Explain how organisational culture can affect an employeeâ€™s ability to make ethical decisions.
5.Explain how specific situation can affect an employeeâ€™s ability to make ethical decisions. Given an example of a situation.
6.Explain the theory of cognitive dissonance and its relationship to how individuals may respond when confronted with an ethical situation at work that is inconsistent with their values.
7.Describe a simple conceptual framework for dealing with ethical dilemmas.
8.Identify a Code of Ethics relevant to accountants. Explain each of its key principles.
9.Explain one way in which unethical behaviour in the workplace should be handled.
10.Explain two methods that an organisation might chose to communicate its ethics, values and standards to its employees.
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