FNSACCT401B – PROCESS BUSINESS TAX REQUIREMENTSand incorporatingFNSBKPG404A – CARRY OUT BUSINESS ACTIVTY AND INSTALMENT ACTIVTY STATEMENT TASKS

ASSESSMENT 2 – MARKING GUIDE

Task / Topic / Element of competency / Marks available / Marks required to achieve competency
1 / Methods to complete activity statements / FNSACCT401B/3
FNSBKPG404A/5
FNSBKPG404A/6 / 10 / 45
2 / Methods to complete activity statements / FNSACCT401B/3
FNSBKPG404A/5
FNSBKPG404A/6 / 10
3 / Methods to complete activity statements / FNSACCT401B/3
FNSBKPG404A/5
FNSBKPG404A/6 / 45
4 / GST Adjustments / FNSACCT401B/3
FNSBKPG404A/5 / 5 / 11
5 / GST Adjustments / FNSACCT401B/3
FNSBKPG404A/5 / 5
6 / GST Adjustments / FNSACCT401B/3
FNSBKPG404A/5 / 5
7 / GST and other taxes including Instalment Activity Statement / FNSACCT401B/3
FNSBKPG404A/4
FNSBKPG404A/5
FNSBKPG404A/6 / 5 / 14
8 / GST and other taxes including Instalment Activity Statement / FNSACCT401B/3
FNSBKPG404A/4
FNSBKPG404A/5
FNSBKPG404A/6 / 5
9 / GST and other taxes including Instalment Activity Statement / FNSACCT401B/3
FNSBKPG404A/4
FNSBKPG404A/5
FNSBKPG404A/6 / 5
10 / GST and other taxes including Instalment Activity Statement / FNSACCT401B/3
FNSBKPG404A/4
FNSBKPG404A/5
FNSBKPG404A/6 / 5
Total / 100 / 70


TASK 1 – 10 Marks

a)  As Lee’s business has an annual turnover of less than $2,000,000 he may choose to account on either a cash or accruals basis. (2 marks)

b)  CASH METHOD (deduct 1 mark for each error to a maximum of 4 marks)

Cash Sales (16,500 X 1/11) 1,500

Credit Sales (3,300 + 8,800) X 1/11 1,100

2,600

Cash Purchases (8,800 X 1/11) (800)

Credit Purchases (3,300 + 5,500 + 2,200) X 1/11 (1,000)

(1,800)

Amount of GST payable $800

ACCRUALS METHOD (deduct 1 mark for each error to a maximum of 4 marks)

Cash Sales (16,500 X 1/11) 1,500

Credit Sales (8,800 + 6,600 + 12,100) X 1/11 2,500

4,000

Cash Purchases (8,800 X 1/11) (800)

Credit Purchases (4,400 + 6,600 + 7,700) X 1/11 (1,700)

(2,500)

Amount of GST payable $1,500


TASK 2 – 10 Marks

Deduct 1 mark for each incorrectly reported (bolded & underlined) item to a maximum of 10 marks

0 / PAYG income tax instalment
No Obligation for this period
PAYG tax withheld
No obligation for this period
Fringe benefits tax (FBT) instalment
No obligation for this period
Goods and Services Tax (GST)
For the MONTH from 1 April 2010 to 30 April 2010 / Summary
Amounts you owe the ATO
Total sales and income and other supplies including capital / G1 / 150,315 / GST on sales or GST instalment / 1A / 9,093
Wine Equalization tax / 1C
Does this amount at G1 include GST? Yes/No / YES / Luxury car tax / 1E
Exports / G2 / 0 / PAYG tax withheld / 4
Other GST-free supplies / G3 / 50,105 / PAYG income tax instalment / 5A
Capital acquisitions / G10 / 3,795 / FBT instalment / 6A
All other acquisitions / G11 / 31,314 / Fuel tax over claim / 7C
1A + 4 + 5A + 6A + 7C / 8A / 9,093
0 / Amounts the ATO owes you
GST on purchases / 1B / 2,270
Wine equalisation tax refundable / 1D
Luxury car tax refundable / 1F
These boxes represent the various boxes on the BAS form / Credit from PAYG income tax variation / 5B
Credit from FBT variation / 6B
Fuel tax credits / 7D
1B + 5B + 6B + 7D / 8B / 2,270
Payment or refund?
Is 8A more than 8B? (indicate with an X)
Yes, then write the result of 8A minus 8B at 9. This is the amount payable to the ATO. / X
No, then write the result of 8B minus 8A at 9. This amount is refundable to you (or offset against any other tax debt you have).
Payment due
9 / 6,823


TASK 3 – 45 Marks

a)  GST classification worksheet (deduct 1 mark for each error to a maximum of 20 marks)

Outputs:

Account Details / Outputs / Taxable / Exports / GST- Free / Input Taxed / Excluded
Sale of goods & services / 55,000 / 55,000
Export Sales / 11,000 / 11,000
Sale of old fax machine / 770 / 770
Interest received / 440 / 440
Commercial Rent / 27,500 / 27,500
Residential Rent / 8,800 / 8,800
TOTALS / 103,510 / 83,270 / 11,000 / - / 9,240
GST Classification Worksheet Reference / G1 / G6 / G2 / G3 / G4


Inputs:

Account Details / Amount / Capital Purchases / Non Capital Purchases / Taxable Supply / Input Taxed / GST Free / Excluded
Business general expenses / 33,000 / 33,000 / 33,000
Business stock purchases for resale purposes / 9,900 / 9,900 / 9,900
Business council & water rates / 550 / 550 / 550
Contractor – no ABN quoted / 2,200 / 2,200 / 2,200
Depreciation / 4,400 / 4,400
Bank Fees / 220 / 220 / 220
Purchase of new fax / 2,200 / 2,200 / 2,200
Wages & salaries (gross) / 55,000 / 55,000
PAYG Withholding / 15,000 / 15,000
Superannuation / 4,950 / 4,950
Commercial rent expenses / 3,300 / 3,300 / 3,300
Residential rent expenses / 440 / 440 / 440
TOTALS / 131,160 / 2,200 / 49,610 / 50,600 / 440 / 770 / 79,350
GST Classification Worksheet Reference / G10 / G11 / G17 / G13 / G14 / Excluded

b)  GST Calculation Worksheet (deduct 1 mark for each error to a maximum of 10 marks)

Note: Do not deduct marks due to consequential errors.

G1 / Total Sales (incl any GST) / $103,510 / G10 / Capital Purchases (incl any GST) / $ 2,200
G2 / Exports / $ 11,000 / G11 / Non-Capital Purchases (incl any GST) / $ 49,610
G3 / Other GST –Free Sales / $ - / G12 / G10 + G11 / $51,810
G4 / Input Taxed Sales / $ 9,240 / G13 / Purchases for making Input Taxed Sales / $ 440
G5 / G2 + G3 + G4 / $ 20,240 / G14 / Purchases without GST in the price / $ 770
G6 / Total Sales subject to GST (G1 minus G5) / $ 83,270 / G15 / Estimated Purchases for Private Use or not Income Tax Deductible / -
G7 / Adjustments (if applicable) / - / G16 / G13 + G14 + G15 / $ 1,210
G8 / Total Sales subject to GST after Adjustments (G6 +G7) / $ 83,270 / G17 / Total Purchases subject to GST (G12 minus G16) / $50,600
G9 / GST on Sales (G8 divided by eleven) / $ 7,570 / G18 / Adjustments (if applicable) / -
G19 / Total Purchases subject to GST after Adjustments (G17 + G18) / $50,600
G20 / GST on Purchases (G19 divided by eleven) / $ 4,600
NET GST PAYABLE
(G9 minus G20) / $ 2,970

c)  Business Activity Statement (deduct 1 mark for each error to a maximum of 15 marks)

Note: Do not deduct marks due to consequential errors

Option 1: Calculate GST and report Quarterly
Total Sales / G1 / $103,510
Does the amount shown at G1 incl GST? / YES
Export Sales / G2 / $ 11,000
Other GST Free Sales / G3 / -
Capital Purchases / G10 / $ 2,200
Non Capital Purchases / G11 / $ 49,610
Option 2: Calculate PAYG Instalments using income x rate
PAYG Instalment Income / T1 / 95,240
T2 / 6.50%
OR
New Varied rate / T3
T1 x T2 (or T3) / T11 / 6,190

T1 – PAYG Instalment Income = (103,510 – 770) – (7,570 – 70) = 102,740 – 7,500 = 95,240

PAYG Instalment Income excludes the sale of a capital asset as it is not ordinary income for PAYG purposes. The GST related to this transaction and any output GST is also excluded.

PAYG Tax withheld
Total salary, wages & other payments / W1 / 55,000
Amount withheld from payments shown at W1 / W2 / 15,000
Amount withheld where no ABN is quoted / W4 / 1,023
Other amounts withheld / W3
Total amounts withheld / W5 / 16,023
FBT (Instalment)
FBT Instalment Amount / F1 / 4,000
F2 Estimated FBT for Year / F2
F3 Varied Amount / F3

Summary:

Amounts you owe the ATO
GST on sales / 1A / 7,570
Wine equalization tax / 1C
Luxury car tax / 1E
PAYG tax withheld / 4 / 16,023
PAYG income tax instalment / 5A / 6,190
FBT instalment / 6A / 4,000
Deferred Company instalment / 7
1A +1C+1E+4+5A+6A+7 / 8A / 33,783
Amounts the ATO owes you
GST on Purchases / 1B / 4,600
Wine equalization tax refundable / 1D
Luxury car tax refundable / 1F
Credit from PAYG income tax instalment variation / 5B
Credit from FBT instalment variation / 6B
1B+1D+1F+5B+6B / 8B / 4,600
Payment Or Refund
Is 8A more than 8B? / Yes / No / YES
Your payment or refund amount / 9 / 29,183


TASK 4 – 5 Marks

Deduct 1 mark for each error to a maximum of 5 marks

GST collected = $8,250 / 11 / $ 750
Less GST paid = $5,940 / 11 / $ 540
Adjustments:
- Returns from customers = $ 880 / 11 / $ 80
+ Returns to suppliers = $3,190 / 11 / $ 290
Net GST Payable / $ 420

TASK 5 – 5 Marks

Deduct 1 mark for each error to a maximum of 5 marks

ITC = 1/11 x $2,200 x 1,600/2,000

= 1/11 x $2,200 x 80%
= $100 x 80%
= $160


TASK 6 – 5 Marks

Deduct 1 mark for each error to a maximum of 5 marks

Mistake / Omission / Select one appropriate solution from the following:
·  Error
·  Increasing Adjustment
·  Decreasing Adjustment
You have just discovered that 2 years ago you left out $55,000 of taxable supplies from the BAS / Error
A previous purchase of $16,000 included in a prior BAS has been cancelled / Increasing Adjustment
You have failed to claim input tax credits on an invoice of $1,100 in the last BAS / Error
A sale of $2,200 reported in a prior BAS has become taxable / Increasing Adjustment
A taxable supply of $2,750 from the last quarterly BAS has now been cancelled / Decreasing Adjustment


TASK 7 – 5 Marks

(a)  Deduct 1 mark for each error to a maximum of 3 marks

Sales / $ 44,000 / $ 40,000
Commercial rent received / $ 11,000 / $ 10,000
Residential rent received / $ 8,800 / $ 8,800
Interest received / $ 1,200 / $ 1,200
Dividend income / $ 3,300 / $ 3,300
Sale of business printer / $ 2,200 / -
PAYG Instalment Income / $ 63,300

(b)  Deduct 1 mark for each error to a maximum of 2 marks

Note: do not deduct marks for consequential errors

PAYG Income Tax Instalment / $63,300 x 6.2%
= 3,924.60
= 3, 924 (excluding cents)


TASK 8 – 5 Marks

Deduct 1 mark for each error to a maximum of 5 marks

Luxury car tax (LCT) / 2009/2010
Luxury car threshold / 57,180.00
Motor vehicle for sale GST inclusive priced at … / 79,200.00
LCT rate / 33%
Amount exceeding threshold (GST inclusive) / 22,020.00
Amount exceeding threshold (GST exclusive) / 20,018.18
Apply LCT to excluded amount / 33% x 20,018.18 = 6,606.00
Enter whole dollars only at LCT at 1E on BAS Summary / 6,606.00
Therefore new sale price is … / 85,806.00

TASK 9 – 5 Marks

Deduct 1 mark for each error to a maximum of 5 marks

a) GST payable (refund) / = $(68,750/ 11) – [$(20,625/11) X 4]
= $6,250 – [$1,875 X 4]
= $6,250 – $7,500
= (1,250)
b) WET payable / = 29% x (68,750 – 6,250)
= 29% x 62,500
= $18,125
c) Due date / If you report annually, the due date for lodging your annual GST return is the day your income tax return is due – in this case 15th May 2011.
Note: If the student says the above in addition to ‘…OR 28 February following the end of the financial year covered by that return or information report’ – advise that this only applies if the business is not required to lodge an income tax return.


TASK 10 – 5 Marks

a)  Deduct 1 mark for each error to a maximum of 4 marks

Litres of diesel used / $377,000 / $1.45 / 260,000 litres
Litres of unleaded used / $108,800 / $1.28 / 85,000 litres
Total litres used in business activities / 345,000 litres
Fuel tax credit / 345,000 @ 19.0715 cents /100 / $65,796

b)  Deduct 1 mark for each error to a maximum of 1 mark

If you report and pay monthly, the due date for lodging your activity statement and paying any amount you owe on that statement is 21 days after the end of each month – hence in this case 21st July 2010.

Course: 19192 Certificate IV Financial Services (Accounting) SAKAI/Accounting/FNSACCT401B

10/8/2010 Version 1

FNSACCT401B - Assessment 2 MG S2 2010 - V1 Meadowbank TAFE – NSI Page 1 of 17