What Amounts are Deductible for Kate’s Business - Accounting & Finance Assignment Help

Assignment Task

Question 1:
Required: Discuss briefly, citing sections, whether the following amounts are deductible for the taxpayer.
i. The taxpayer purchased a new microwave oven (for $150) for the tenants to use in the taxpayer's rental property.
ii. The taxpayer, a sole trader, paid their accountant $2000 for tax advice regarding whether they should restructure their business structure from being in the form of a sole trader to a trust.
iii. The taxpayer, a practicing accountant, paid $2000 in HECS-HELP fees to undertake a Masters of Accounting at the local university.
iv. The taxpayer is a delivery business and has to pay speeding fines (incurred while undertaking delivery activities) in the amount of $500.

Question 2:
Required: For the transaction below, consider the impact of the $300 000 franchise fee as far as its deductibility is concerned, and also discuss whether there are current/future CGT consequences.
Sarah runs a burger shop. She wishes to increase business so pays a franchise fee of $300 000, which allows her burger shop to be part of the “Starving Burgers” franchise. This $300 000 is paid as a lump-sum and allows her to run the franchise for 10 years.

Question 3:
Required: Consider what amounts are deductible for Kate’s business.
Kate ran a small clothing importing business (as a sole trader) that often sold goods on credit to retail stores. It accounted for sales on an accrual basis. During the tax year, Kate wrote off the following amounts in the accounting records of the business:

• $10 000 owed to the business by one retail store located in Collingwood. This was owed due to the Collingwood business having acquired $10 000 of goods
from Kate’s business The Collingwood store had gone into liquidation, and it was estimated that creditors such as Kate would receive 60 cents in the dollar owed to them.

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