QUESTION

Tang Foods Pty Ltd is a private company with Bruce and his wife Eve being the two Directors and each owning one ordinary share. It has been operating since 2005. The company is registered for GST. Bruce and Eve Tang have provided you with the following financial information and they ask you to prepare the tax return for the company. The company sells imported food from Asia.

The figures in the financial accounts are net of GST (that is they have already excluded the GST from the figures) except where specifically stated.

RECEIPTS Sales	6,234,052
Dividend fully franked	12,000
EXPENSES
Purchase of stock	155,000
Fine for breaching Health and Safety regulations	4,250
Prepaid rental for the shop (Note 1)	18,000
Wage to Brad (Note 2)	25,750
Interest on loan	10,417
Repairs (Note 3)	37,080
Bad debts (Note 4)	2,985
Advertising in the local paper	12,758
Purchase of new equipment for the company	163,000
Cleaning costs	22,589
Office rent	18,000
Depreciation of plant and equipment	32,476
Fringe Benefits Tax	14,320
Salary paid to employee secretary	130,000

Notes

Note 1: The Company prepaid the 18 months rent for the shop for the period 1 August 2016 to 1 January

2018.

Note 2: Brad is aged 15 and the son of Bruce and Eve. He is still at high school. The task he undertook was helping Eve with the accounts. He only works for 2 hours a day for three days a week. The normal pay for a person to do this job would have been $6,670.

Note 3: The repairs consisted of the following:

$8,000 to replace the windows that were damaged in a storm,

$25,000 spent on initial repairs to a second hand freezer used for extra storage,

$4,080 on maintenance costs on the packaging equipment caused by normal wear and tear.

Note 4: The bad debts represent a customer that has appointed an administrator to their business.

Other information:

New depreciating assets of the Company: The figures are exclusive of GST.

Cash register purchased on 1 July 2016 at a cost of $3,750. The effective life is 6 years.

A minivan for deliveries - this was purchased on 1 July 2016. The cost was $48,750. The effective life is 5 years.

The Company bought a new luxury motor car for Bruce and Eve to use for whatever purpose they like on 1 July 2016 for $110,500. The car has an effective life of 5 years. The company paid Fringe Benefits Tax of $14,320.

Trading stock:

The value of the opening stock as at 1 July 2016 was $59,000

The value of the closing stock as at 30 June 2017 is:

Cost $180,000

Market value $110,890

PAYG Instalments: The Company made the following payments of income tax to the ATO:

1 October 2016 - $120,000

1 January 2017 - $120,000

1 April 2017 - $140,000

30 June 2017 - $120,000

REQUIRED:

Please calculate the tax payable for the company. You are required to provide a brief explanation of each item and why it is included or excluded.