Response to the following problem:
RIP Pty Ltd is a resident private company carrying on the business of undertaker/funeral director. It operates out of premises comprising office facilities, a chapel and assembly area and professional rooms. Its other assets include a fleet of motor vehicles.
For the year ended 30 June 2016 the company reported a net profit of $2.45m. Its income arises from the provision of funeral services financed as follows:
i) Fees payable under a ‘net, 30 days' invoice.
ii) Fees payable under several external insurance contracts to which bills are issued under a ‘net, 30 days' arrangement. For instance, some funeral costs are paid by the Transport Accident Commission, others are paid out of private life assurance plans.