BFA714: Australian Tax Law - Zeta Pty Ltd Case Study - Law Assignment Help

Assignment Task:

Assignment 2 

This assignment is to be completed in pairs (i.e. with one other student). There is no  answer template and you are not required to submit this document with your answer.  Ensure that your assignment submission includes the names and student numbers  of both students in your assignment group as well as your assignment group number  from MyLO. 

Zeta Pty Ltd accounts for its income and expenditure on an accruals basis. A review  of the financial records for the financial year ending 30 June 2020 reveals the  following details.

1. Aggregated annual turnover 

Zeta’s aggregated annual turnover for 2017/2018 was $14 million and for 2018/2019 was $9 million. The company is not sure whether it qualifies as a small business  entity, but if it does, it wants to use all of the concessions available. 

2. Interest 

Zeta placed $1,000,000 on a twelve-month term deposit with the FED Bank on 1  November 2018. On maturity, the bank was instructed to transfer the interest amount  of $60,000 to Zeta’s trading account and reinvest the principal of $1,000,000 for a  further twelve-month term deposit. The interest that accrued between 1 November  2019 and 30 June 2020 was $33,000. This was the only interest earned by the  company for the 2019-20 income year.

3. Rent 

Zeta Pty Ltd owns a small office building in West Hobart, which is let to a waste  management operator. The rent for this building is $6,000 per month, payable one  month in advance. On 30 June 2020, the tenant paid Zeta an extra 2 months’ rent in  advance. This amount of $12,000 may have to be refunded in the event that the  tenant is precluded from using the premises for its intended purpose.  

4. Royalties 

Zeta Pty Ltd received a gross royalty of $100,000 from its New Zealand subsidiary on 2 June 2020. New Zealand Non-Resident Withholding Tax (NRWT) of 15% was  deducted from this payment, leaving a net receipt of $85,000. 

5. Insurance 

On 1 March 2020, trading stock in transit was stolen. A claim for insurance was  finalised on 30 June 2020 and Zeta Pty Ltd expects to receive $30,000 in respect of  its insurance claim within two weeks. This amount has been taken up as a sundry  debtor in the Statement of Financial Position. 

6. Dividends 

Zeta Pty Ltd owns shares in BHP, a publicly listed company. On 15 June 2020, BHP declared a fully franked dividend, of which Zeta’s share amounted to $40,000. This  dividend was paid on 26 June 2020.  

7. Trade debtors 

Trade debtors of $260,000 includes a provision for doubtful debts of $25,000. In the  previous year this provision was $12,000. 

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