You are working as a tax accountant in a chartered accounting firm. One of your clients Chrystal View Pty Ltd (a resident private company) sent you the data file generated from the integrated financial software.
Instruction: You have now run the data file in your integrated financial software and generated the P & L statement and Balance sheet and found the following information to complete the requirements.
I.Please use the P & L Statement, Balance Sheet and other notes from the client’s accountant to calculate the following:
a) Calculate Taxable Income
b) Calculate Tax Payable/Refund
II. Advise the financial management strategies the business followed that assisted optimum tax position.
III. As an accountant what organisational policy and procedures you must follow in relation to the preparation of tax documents of Chrystal View Pty Ltd?
IV. What is the payment due date of Chrystal View Pty Ltd?
V.As a part of the document management process what would you do to ensure that your tax return satisfies the compliance requirements?
VI.Based on your finding above what is the BAS lodgement due dates of Chrystal View Pty Ltd?
VII Chrystal View Pty Ltd has provided an extract of their forecasted cash flow and you have prepared the BAS for the September quarter.
Chrystal View Pty Ltd reports and pays GST quarterly. From the above information what would you bring to the attention of your client regarding the tax (GST) obligations?
VIII. Keeping good records is essential for people in small business. Maintaining good records of your transactions and tax invoices will help you to manage your cash flow and make sound business decisions. It will also make it easier for you to meet your tax obligations, and potentially save you time and money in the future.
Why is it important for Chrystal View Pty Ltd to maintain a good record-keeping system?
IX.As a tax planner your ethical responsibility is to advise Chrystal View Pty Ltd about the business records they need to keep as it ensure a sound audit trail. List the business records that you would advise Clear View Pty Ltd to keep.
Part b: Scenario 2
You are an external accountant working for your client Super Cool Pty Ltd. The company has provided you the following cash flow budget.
You, as the accountant, in consultation with management of Super Cool Pty Ltd, has made the following forecasts to assist the group to plan for the coming quarter:
Sales (product 1) is $200,000 in June. This sale is expected to be increased by 10% each month.
Sales (product 2) is $150,000 in June. This sale is expected to be increased by 5% in next two months and 10% in the third month
Interest income is in June $1,500. This expected to be increased by 1% each month in the September quarter.
Accounting and legal fees is $1,000 in June and expected to be increased by 1% in each following month.
Advertising and promotion is 20% of each month’s total sales.
Business loan payment is $10,000 each month as the loan was taken on 3 years fixed rate
Interest and bank charge is $120 each month.
Printing, postage, stationary and packaging cost was $800 in June. Due to following Green Environment policy, the business is expected to reduce this cost by 1% each month from July.
Rent of business premise is $2000 each month. This is expected to be increased by 1% in the third month of the budgeted quarter (Jul-Aug-Sept).
Telephone bill is 2% of each month’s advertising and promotion expense.
Utility bill is 0.3% of total sales.
Wages and salaries are 2% of each month for the first two months of the quarter. But due to forecasted increased commission in the last month of the quarter, the wages and salaries are expected to be 3% of that month’s sales.
Opening cash for the month of July is $120,000.
a)Based on the given information above complete the forecasted Cash Flow Statement.
Review the periodic closing cash balance. Do you think the company can be able to pay the estimated tax obligations? Justify your answer.
II.The following data (Next Page) of an actual and budgeted P & L has been generated from an integrated financial software system of Super Cool Pty Ltd. You continued to work as a tax accountant and tax planner for Super Cool Pty Ltd.
a)Calculated the budgeted and actual tax obligations
b) Analyse the variance between actual and budgeted tax obligations.
c) Identify which areas need to be addressed to improve the tax obligations.
d) What tax plans you can advise accordingly after evaluating the variance analysis?