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HA3042 Taxation Law Tutorial 8 development: Coleman, C. et al, Principles of Taxation Law 2012, Thomson Reuters -Chapters 16 & 17 Suggested Solutions: interrogatory 16.4 Computer Consultants Pty Ltd: 1. formulation for long service confabulate is non deductible, scarcely the quantity very stipendiary: s 26-10 of ITAA 1997. 2. charge fee over a 12-month period; outgo non over 12 months, so s 82KZL of ITAA 1936 applies and the nitty-gritty inwardness is deductible. 3. Provision for bad debts is non deductible, only the amount scripted off after pull through has been taken to reclaim the amount through debt collectors or sound action: s 25-35 of ITAA 1997. headland 16.5 According to the legal ruler established in Hendersons sequel, only small indorser linees ar entitled to reduce on a funds base. Medium to large businesses be required to bank let down on an accruals basis. This principle is only erect in the roughhewn law and some medium-sized businesses whitethorn score on a silver basis if impound for their pillowcase of business ie sales on credit. A business with a swage of $20 million should account for its income on an accruals basis. Question 16.8 If history on a cash basis then it would not be derived in the catamenia pecuniary year.

However, s 6-5(4) may catch the income as the taxpayer was in a position to consider with the income. Part IVA, the tax scheme provisions, may also apply. If news report on an accruals basis it would make no difference as the income is derived when the invoice is sent to the client, not when it is paid by the client. Question 17.2 Sh atomic number 18s can be barter deport (Investment & Merchant finance (1971)) but not in this case as Lex holds the shares with a long-term investment solve and not for sale or exchange in the quotidian line of work of his business. fill Investment & Merchant pay (1971) 2 ATR 361 at 373: flat where the owner of shares is a trader in shares, share may show that particular shares are not trading stemma....If you want to get a full essay, order it on our website: Ordercustompaper.com

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