PREPARE INCOME TAX RETURNS

FNSACCT502A/B

SOLUTIONS MARKING GUIDE

2011 JUNE FINAL EXAMQuestion1 12 marks

Part (a) (b)

Luke

Libby

Salary128,000Business Income29,100

Interest700Interest700

Net Investment Losses(2,600)

Taxable income126,100Taxable Income29,800

Income Tax34,607.00Income Tax3,570.00

Med Levy 1.5%*1261001,891.50Med Levy 1.5%*29,800447.00

Med Surcharge

1% * 126100 +6,3001,324.00Med Surcharge

1% * 29,800298.00

HELP HRI = 126100+2600+6300 = 135000 x 8%10,800.00Less: Offsets

Less PAYG(50,000.00)Mawto(500.00)

Net tax Refundable(1,377.50)LITO(1,500.00)

Net tax payable2,315.00

Combined Income for surcharge purposes

126,100+6,300+2600+29,800=164,800

Family Threshold 154,000

Marking Guide

6 Marks each parts (a) & (b) -2 Error of Principal, -1 Other error

-3 if Medicare surcharge not considered.

Question 2 18 Marks Penalty

Assessable Income

Wages12,0001

Travel Allowance1,0001

Interest2001

Rental Income30,0001

Recovery rental bond board1,0201

44,220

Less Deductions

Rates1,0401

Maintenance of Lawns8201

Construction Driveway capital works

2 %*3,400*3/12212

Building capital works 120000 x 2.5% x9/12 2,2502

Repairs3,2001

DIV Dishwasher

2200/10*9/12*200%3302

Ceiling Fan 5000-1

DIV

57466 / 8 x 9/12 x210775-2 if missing

Operating expenses-1 per error

Petrol & Oil5,100

Services & repairs4,300

Car washes130

NRMA220

Insurance1,400

Registration900

DIV10775

Total22825

Log Book

22825*55%12554-1

12% original cost

12%*57466*9/125172-1

1/3 of actual exps

1/3*228257608-1

Cents Per KM

5,000* 74c3700-1

Total Deductions

Motor Vehicle Expense 12554Etags Tolls + 420-1 if missingTotal Deductions 12974

Question 6 12 marks -2 per error of CGT principle, -1 per other errorCalculation of Capital Gain

Pua/otherCollectible

Hindmarsh sharesPre sept1985

Morris shares2,200- 2000* 123.4/77.6No gain no loss

Johnson shares 6000-8000(2000)

Mortimer shares 25,000-1000015000

Stamps 2000-1750(250)

Painting 30,000-15,00015,000

Motor vehicleExempt

Leather lounge PUA