Determining the income and expenses


Assignment Problem: Lyra and Myra are professionals working full time in their respective fields. They are the best of friends as well. They rent a couple of rooms out of a 4 bedroom property belonging to Nyra's grandparents. They pay a rent of $ 250 per person per week including bills. Because they are the best of friends, they have an investment property which they have bought together. They bought the property for $ 300,000 including stamp duty in 2018. The following are the details of the investment property

Rental income - $ 500 per week

Interest expense - $ 300 per week

Insurance - $ 100 per week

Body corporate - $ 150 per week

Current mortgage balance $ 360,000

Lyra and Myra also have an arrangement with Hyra who is another of their friends. Hyra is a chef and has a side business making candles. Hyra does not have an ABN or a company. She makes candles in her free time and gives it to family and friends. Lyra and Myra have an agreement that if they manage to get anyone to buy 5 of Hyra's candles, Hyra would cook dinner for Lyra, Myra and Nyra. The cost of that dinner would be $ 30 per dinner per person. During FY20, Hyra had cooked dinner 5 times.

Annual salary for Lyra - $ 30,000

Annual salary for Myra - $ 25,000

Annual Salary for Nyra - $ 35,000

Annual Salary for Hyra - $ 50,000

Annual salary for Nyra's grand parents - $ 40,000

Question: What of the above items would be included in Lyra, Myra, Nyra, Hyra and Nyra's grandparent's income and expenses?

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Taxation: Determining the income and expenses
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