Assessment 1:
Payroll and Activity statement
Assessment 1: Portfolio activities
Part A: Business Activity Statement
Task 1
Indicate with an ‘X' which category the following supplies fall into:
Task 2 - Prepare IAS and PAYG Instalment Income
RinaanLittle operates a small business and receives investment income. She accounts for GST andPAYG Instalments on a cash basis, reports GST annually and reports PAYG instalment incomequarterly.
This is a list of revenue (GST inclusive where applicable) received for the July - September 2017quarter by Rinaan Little:
Required:
a. Calculate the PAYG instalment income.
b. Calculate the PAYG income tax instalment assuming a PAYG income tax instalment rate of 6.20%.
c. Prepare the Instalment Activity Statement for the quarter using option 2.
d. What amounts to be reported at G1 label of BAS?
Task 3: BAS Case study on Account Method
Please refer to e-learning for Enchanting Florist and complete the following BAS summary.
Task 4: BAS preparation - Cash book
Task 5: BAS - Using a classification worksheet
Please refer to e-learning for Case study: BAS - Using a classification worksheet - Cash Basis and complete all related BAS labels from the following.
a) Classification worksheet (Output)
Classification worksheet (Input)
b) GST Calculation Worksheet for BAS
c) Cash flow
Jumping Jacks Pty Ltd has provided an extract of their forecasted cash flow and you have prepared the BAS for the September quarter, the payment due as shown on the BAS is $30,000.
Extracted forecasted cash flow
Required:
Jumping Jack's Pty Ltd reports and pays GST quarterly. From the above information what would you bring to the attention of your client regarding the payment of this amount?
Task 6 - Luxury Car Tax
Luxury Car Pty Ltd is in the business of selling motor vehicles. A luxury motor vehicle is made available for sale and is priced initially at $85,200. Based on the 2016/2017 luxury car tax threshold of $75,526and LCT rate of 33%:
Required:
Calculate:
a) the Luxury Car Tax (LCT) amount; and
b) the new selling price of the vehicle.
Task 7 - Wine Equalisation Tax
LWS Wine Wholesalers is voluntarily registered for GST and has not made an election to pay GST by instalments, hence has chosen to report and pay / claim a refund of GST annually. The tax agents have advised that for the 2016/2017 financial year the business is required to lodge its income tax return by 15th May 2018.
During 2016/2017 it derived ‘assessable dealings' from the sale of its taxable wine supplies amounting to $70,404 (GST and WET inclusive) for the quarter.
Required:
a) Calculate the WET payable.
b) When is the WET due date?
Task 8 - Fuel Tax Credit
Western Union Landscaping Supplies Pty Ltd mines sand to use in landscaping. They dominate the sand mining industry and have a GST turnover of more than $20 million dollars! Due to this they must report and pay GST monthly and lodge his activity statement electronically.
Western Union's records show that they used $392,000 of diesel at $1.42 per litre and $120,800 of unleaded petrol at $1.29 per litre for the business excavations for the month of June 2016.
The diesel and unleaded petrol they use in their excavators are eligible for fuel tax credits. The current fuel tax credit rate for mining activities is 40.10 cents per litre.
Required:
a) Calculate the fuel tax credit Western Union Landscaping Supplies Pty Ltd may claim using the basic ‘constructive method' calculation.
Task 9 - Research task
a) What are the advisory services a bookkeeping business can provide?
b) How can you ensure that the lodged activity statement has met the legislative and regulatory requirements?
c) What journal entries are recorded to record payment/refund?
d) List the types of Accounting Software used to maintain and record GST records and for GST Lodgments.
e) As a Bookkeeper you receive confidential financial records of your clients. Explain:
I. Which section of Privacy Act 1988 prohibits you to disclose these financial records to other clients and fellow bookkeepers?
II. What role industry codes of practice and industry codes of ethics play here?
f) What qualification you need to sign off BAS/IAS to ATO?
g) Research Income Tax Assessment Act 1997 and explain:
I. Which division discusses about GST and what are the areas?
Task 10 Adjustments
a) You are given some unrelated examples of errors/ omissions that were made on prior BAS reports. Advise whether they are errors requiring lodgement of a Revised Activity Statement or adjustments (increasing / decreasing) to account for when lodging the next BAS.
Part B: Establish and Maintain a Payroll System
Task 10
A new member of the staff-Sahara has been working with you for two months. She is new to the financial services industry. She needs a clear understanding of how this industry's system works in practice. She studied the structure of the industry in her Diploma of Business class but she has forgotten most of what she learnt. You are given a job by your supervisor to provide a comprehensive orientation on payroll, particularly focusing in the following areas:
Australian Business Number (ABN)
Tax File Number (TFN) Declaration
HELP
Medicare levy
Payroll tax
ATO Pay As You Go (PAYG) withholding tax laws
Australian Bureau of Statistics (ABS) Act 1975
ATO Fringe Benefits Tax laws
ATO Superannuation Laws
Tax Agent Services Act 2009 (TASA 2009)
Industry Awards
Individual employment contracts
Leave Acts: annual, sick and long service
Payroll tax laws
Privacy Act 1988
Workers compensation and occupational health and safety
(OHS) Acts and regulations
Task 11
Sandra has just finished her Bachelor of Accounting from the University of Sydney. She wants to become a registered tax agent. Please advise Sandra the registration requirements and codes of professional conduct from Tax Practitioners Board (www.tpb.gov.au) and Business Activity Statement Agent.
a) Registration Requirements for Tax Agent
b) Who can be a BAS Agent?
c) Can BAS agent provide payroll services?
d) Discuss the scope of BAS agent in payroll services.
e) Who else can provide payroll services? identify the need for independent expert advice providers.
Task 12
Instruction for student:
This is an individual task. You need to calculate PAYG Tax and HELP debt for the following employees (Use current year Weekly tax table and Weekly HELP table available in ATO website www.ato.gov.au) assuming all employees are residents below.
Task 13
Instruction for student:
This is an individual task. You need to fill the following table using appropriate tax table from ATO website www.ato.gov.au (Please show your calculations / break down below the table). All these employees have worked 52 weeks in the 2014- 2015 financial year.
Task 14
Instruction for student:
This is an individual task. You need to calculate Medicare Levy & Medicare Levy Surcharge based of individual's yearly income. All these employees are adult, single and have no private health insurance cover. Please show your calculations / break down below the table.
Assessment 2:
Part A: Business Activity Statement
Task 1 - GST Registration
Required:
a) List the annual GST registration turnover threshold levels applicable to businesses/enterprises.
- General businesses
- Not for profits
- Taxi drivers
b) Advise the annual turnover threshold rule to be allowed to account for GST on a cash basis.
c) Advise the annual turnover threshold rule to be allowed to account for GST on an accrual basis.
Task 2 - GST Calculation(s)
Glen's Manufacturing Pty Ltd, a panel beating business reports and pays GST quarterly. The following tables summarise its sales and purchases over time.
Required:
a) Using the tables provided, determine which quarterly BAS period each of the following transactions would be reported in using:
i) Cash method of reporting for GST and
ii) Accrual method of reporting for GST
b) Calculate the net GST payable / (refundable) for the quarter ending 30th June 2016 if the entity reports GST on:
i) Cash basis; and
ii) Accrual basis.
Task 3 - BAS Case Study - Accounts Method (Accruals)
You are the accountant of Accurate Accounting Pty Ltd. Nice Scent Shoppe is one of your clients of which you prepare BAS on quarterly basis. You have received the following P & L and Balance Sheet information from Nice Scent Shoppe for the current quarter.
Required:
Prepare BAS for Nice Scent Shoppe for the current quarter.
Tax Codes:
Complete the tax code, description and rate (%) of Rinaan's Lawn Mowing & Garden Care Services Chart of
Accounts:
Task 4 - BAS Case Study - Accounts method (Cash Book)
Ms Justyna Jason operates two related businesses; a fruit shop and a cake shop. The two related businesses have applied to form a GST group and have satisfied certain membership requirements. Damon trades under the business names: ‘Jason the Fruiter' and ‘Dillinger's Cakes' respectively. The GST group are treated as a single entity. The Cake business, ‘Justyna's Cakes' is known as the ‘representative member', managing the group's GST affairs. The group accounts for GST on a cash basis and have chosen to report GST monthly. PAYG income tax instalment and PAYG tax withheld are reported quarterly.
The following page(s) are the extracts of April's monthly Cash Receipts Book and Cash Payment's Book.
Required:
Complete the Business Activity Statement for the month on September 2012 by extracting the data from the Cash Receipts and Cash Payments Book.
Part B: Establish and Maintain a Payroll System
Instruction for student:
This is an individual task. You need to create a company file in MYOB using the given information and enter employee details and their payroll details applying relevant legislation and standards. Send your MYOB file at your teacher's email address.
Task 5:Create a company using the following information in MYOB and Process Payroll
Set up a company with your name- Your First Name-Last Name-Your Student ID Mount Isa Cleaners Pty Ltd with ABN 99 999 999 999. Use current year (you don't need to change any details, like conversion month, current year). Select Retail industry with business type- Garden Centre/ Nursery. Load tax level. Load payroll tax. Use 9.50% for all super rate. Set up the opening Balance:
Task 6 Process Weekly payroll using MYOB
Instruction for student:
This is an individual task. You need to create a company file in MYOB using the given information and enter employee details, their payroll details and process Weekly payroll. You need to print 2 payslips and 2 paycheques and send your MYOB file at your teacher's email address.
Required:
a. Process weekly payroll for the last week ended on June and first week ended on July this year
b. Print and attach Pay Cheque for all employees.
c. Print and attach Payslips for all employees.
d. Print payroll liability by category, payroll tax, payroll journal.
e. Email your MYO file to your supervisor's email (Your teacher's email).
Task 7: Reconciliation:
Reconcile the payroll for the month
To reconcile the payroll, you will need to do the following:
- Print a Payroll Register Report for the month
- Print a Profit & Loss Statement for the month
- Print a Balance Sheet for the month
- Using an appropriate format given below, reconcile your monthly payroll and submit the completed reconciliation as part of your Assessment.
Task 8: Handle payroll:
You are required to answer the following questions in short written answer form. Dot point is also acceptable as long as all parts of each question are answered.
1. The Manager is checking the cash flow for the period and can't find the figures for the payroll to date this month. He asks you to provide him with the following information:
- The superannuation payable on the staff wages for the two weeks
- The PAYG tax payable for the two weeks
What figures would you provide to the Manager?
2. An employee has contacted you requesting details of his total superannuation payments. He also requested, on behalf of his wife (Also works in the same organisation), details of her total superannuation payments. He would like a total year to date figure for him and his wife.
What advice would you provide?
3. An employee has advised that she may need to take some additional personal leave for a hospital stay in the next few weeks. She thinks she might need to take about two days for the hospital stay and maybe another day or two after that at home. She asks you to check that she will have enough personal leave.
What advice would you give her?
4. One employee has a query regarding his superannuation. He is concerned that no superannuation has been calculated on his Pay Slip for the week.
What advice would you give him?
Task 9: BAS and IAS:
Complete PAYG Tax withheld portion of the Business's Activity Statement from the following information:
Requirement:
It is the 21st July and you are preparing your monthly Business Activity Statement (BAS). From the above information please complete the following section from the company's Business Activity Statement (BAS):
Attachment:- Portfolio Project.zip