Assignment task:
Alex Jones is a CPA with his accounting practice in the form of sole proprietor. The receipts and payments (excluding GST) for the year ended 30 June 2022 were as follows: Receipts Professional fees: $250,000 Income from part-time teaching at a university: $10,000 Interest on bank deposits: $1,000 Rental income from an investment property: $26,000 Page 2 of 2 Fully franked dividends received from an Australian resident company: $700 Payments Office rent: $30,000 Salary paid to a part-time secretary: $60,000 Electricity: $3,000 Office sundry expenses: $6,000 Train fares from home to work: $500 Entertainment: $5,000 Interest paid on loan to acquire the investment property: $30,000 Council rate and water for the investment property: $2,000 Cost of repairing roof tiles of the investment property: $10,000 Cost of extending a bathroom in the investment property: $30,000 Alex Jones has a carry forward past year tax loss of $10,000. He was single and had private hospital insurance from 1 July 2021 to 30 June 2022.
REQUIRED:
Part A: Assuming that Alex Jones is a resident of Australia for tax purposes, calculate his assessable income, allowable deductions, taxable income and tax liability for the year ended 30 June 2022.
Part B: With reference to case law and statutory law, explain whether the aforesaid receipts are assessable income and payments are.