As per Australian tax law Emma runs a business selling scarves. She purchases the scarves directly from scarf makers in Cambodia and sells them in makers markets in Victoria. The following transactions have taken place during the 2020/21 income year. Please advise Emma as to the tax consequences of each of these transactions (from (a)-(d)), referring where appropriate to legislation in your answer: Emma purchased $3,000 of scarves on 5 July from a scarf maker in Cambodia. The scarves were loaded onto a ship the next day and under the terms of the contract, Emma was to take ownership and control of the scarves once they were loaded on that ship. Half of the scarves were delivered to Emma on 8 August. The rest of the scarves were delivered directly to a customer in Indonesia on 10 August. The customer had purchased the scarves from Emma on 20 July. Click or tap here to enter text. At 30 June, Emma had 30 scarves in stock. The scarves had cost her $3 each Click or tap here to enter text. Emma took 10 scarves out of her stock to give as gifts to friends and family at Christmas time. The scarves cost $30 and had a market selling value of $300. Click or tap here to enter text. Emma gave 8 scarves to a creditor in satisfaction of a $210 debt. The scarves cost Emma $24 and have a market selling value of $240 Click or tap here to enter text.
As per Australian tax law Emma runs a business selling scarves. She purchases the scarves directly from scarf makers in Cambodia and sells them in makers markets in Victoria. The following transactions have taken place during the 2020/21 income year. Please advise Emma as to the tax consequences of each of these transactions (from (a)-(d)), referring where appropriate to legislation in your answer: Emma purchased $3,000 of scarves on 5 July from a scarf maker in Cambodia. The scarves were loaded onto a ship the next day and under the terms of the contract, Emma was to take ownership and control of the scarves once they were loaded on that ship. Half of the scarves were delivered to Emma on 8 August. The rest of the scarves were delivered directly to a customer in Indonesia on 10 August. The customer had purchased the scarves from Emma on 20 July. Click or tap here to enter text. At 30 June, Emma had 30 scarves in stock. The scarves had cost her $3 each Click or tap here to enter text. Emma took 10 scarves out of her stock to give as gifts to friends and family at Christmas time. The scarves cost $30 and had a market selling value of $300. Click or tap here to enter text. Emma gave 8 scarves to a creditor in satisfaction of a $210 debt. The scarves cost Emma $24 and have a market selling value of $240 Click or tap here to enter text.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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As per Australian tax law
Emma runs a business selling scarves. She purchases the scarves directly from scarf makers in Cambodia and sells them in makers markets in Victoria. The following transactions have taken place during the 2020/21 income year. Please advise Emma as to the tax consequences of each of these transactions (from (a)-(d)), referring where appropriate to legislation in your answer:
- Emma purchased $3,000 of scarves on 5 July from a scarf maker in Cambodia. The scarves were loaded onto a ship the next day and under the terms of the contract, Emma was to take ownership and control of the scarves once they were loaded on that ship. Half of the scarves were delivered to Emma on 8 August. The rest of the scarves were delivered directly to a customer in Indonesia on 10 August. The customer had purchased the scarves from Emma on 20 July.
Click or tap here to enter text.
- At 30 June, Emma had 30 scarves in stock. The scarves had cost her $3 each
Click or tap here to enter text.
- Emma took 10 scarves out of her stock to give as gifts to friends and family at Christmas time. The scarves cost $30 and had a market selling value of $300.
Click or tap here to enter text.
- Emma gave 8 scarves to a creditor in satisfaction of a $210 debt. The scarves cost Emma $24 and have a market selling value of $240
Click or tap here to enter text.
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