Frank is a director of Otago Pty Ltd (Otago), an Australian resident private company, with a corporate tax rate for imputation purposes for the 2020/21 income year of 30%. Frank provided you with the following information regarding the company’s franking account: 1 July 2020: Opening balance $500 credit. 29 July 2020: Paid 2020 tax year fully franked final dividend $7,000 28 February 2021: Paid 2021 tax year 60% franked interim dividend $9,000 30 April 2021: Received fully franked dividend from Australian company $4,500 28 June 2021: PAYG instalment paid relating 2020/21 tax year totalled $1,200 30 June 2021: Declared a fully franked dividend of $10,000 Otago had a taxable income of $16,000 for 2020/21. Required 1) Prepare Otago Pty Ltd’s franking account for the 2020/21 tax year and explain any consequences arising from the franking account balance at 30 June 2021. 2) Calculate net tax payable (refundable) for the company.
Frank is a director of Otago Pty Ltd (Otago), an Australian resident private company, with a corporate tax rate for imputation purposes for the 2020/21 income year of 30%.
Frank provided you with the following information regarding the company’s franking account:
1 July 2020: Opening balance $500 credit.
29 July 2020: Paid 2020 tax year fully franked final dividend $7,000
28 February 2021: Paid 2021 tax year 60% franked interim dividend $9,000
30 April 2021: Received fully franked dividend from Australian company $4,500
28 June 2021: PAYG instalment paid relating 2020/21 tax year totalled $1,200
30 June 2021: Declared a fully franked dividend of $10,000 Otago had a taxable income of $16,000 for 2020/21.
Required
1) Prepare Otago Pty Ltd’s franking account for the 2020/21 tax year and explain any consequences arising from the franking account balance at 30 June 2021.
2) Calculate net tax payable (refundable) for the company.
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