Lucy is the Finance Director for Capital Products Pty Ltd. Lucy was previously located at the head office in Adelaide but is currently working from the Canadian office, having relocated there on 1 August 2020. Capital
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Lucy is the Finance Director for Capital Products Pty Ltd. Lucy was previously located at the head office in Adelaide but is currently working from the Canadian office, having relocated there on 1 August 2020. Capital Products anticipate that Lucy will head up the Canadian office for one year with an option to stay for another one year. Paula’s contract with Capital Products entitles her to a salary of $600,000 for 2020/21. This is paid at the rate of $50,000 per month.
Lucy sells her shares in Australian companies before she leaves Australia and makes a
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Discuss Lucy’s status (resident or not) for Australian tax purposes for 2020/21 and the tax implications of the transfer to Canada.
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- Facts Lucy is the Finance Director for Capital Products Pty Ltd. Lucy was previously located at the head office in Adelaide but is currently working from the Canadian office, having relocated there on 1 August 2020. Capital Products anticipate that Lucy will head up the Canadian office for one year with an option to stay for another one year. Paula’s contract with Capital Products entitles her to a salary of $600,000 for 2020/21. This is paid at the rate of $50,000 per month. Lucy sells her shares in Australian companies before she leaves Australia and makes a capital gain of $16,000. She makes another capital gain of $28,000 in January 2021 when she sells shares in Canadian companies. Luc’s husband and two small children will remain in Adelaide. Lucy will rent a studio apartment in Canada and will keep the Adelaide home. Question Discuss Lucy’s status (resident or not) for Australian tax purposes for 2020/21 and the tax implications of the transfer to Canada.Prakash, an engineer, who earns a monthly salary of RM8,000, was transferred to Kuala Lumpur with effect from 1 January 2020. As his accommodation was not ready, he stayed at a hotel up to 28 February 2020 where the room rate was RM200 per day. Subsequently, he moved into a fully furnished bungalow which he shared with another engineer. The company paid a monthly rental of RM10,000 for the house which included RM4,000 for the furniture. Required: Compute Prakash’s gross employment income for YA 2020.Infotech Bhd enters a contract on 1 January 2019 to produce software for a customer for RM7,000,000. Infotech Bhd receives RM2,000,000 from the customer upon contract signing and the balance at the completion of the contract. According to the contract, the customer controls the system during the creation of the program. Infotech Bhd estimates that it will take two years to complete the project and uses the number of labor hours to estimate the rate of completion. Infotech spends 40,000 hours in the first year of the contract and another 10,000 hours the second year Prepare the entries recorded by Infotech over the life of this contract. Assume that all payments are complete by the end of 2020
- On 1 July 2021, McTavish Ltd, and organisation involved in the surfing industry, provided two weeks of surfing lessons to a group of middle-aged executives employed by Big Town Ltd. The lessons concluded on 15 July 2021. The contract required Big Town Ltd to make one payment of $20,000 to McTavish on 15 July 2021 and another payment of $20,000 on 15 July 2022. McTavish typically provides credit to such customers at an annual interest rate of 8%. Required:Prepare journal entries that McTavish Ltd needs to record to recognise revenues associated with the above surfing lessons on 15 July 2021 and on 15 July 2022 in accordance with AASB 15 Revenue from Contracts with Customers.Infotech Bhd enters a contract on 1 January 2019 to produce software for a customer for RM5,000,000. Infotech Bhd receives RM2,000,000 from the customer upon contract signing and the balance at the completion of the contract. According to the contract, the customer controls the system during the creation of the program. Infotech Bhd estimates that it will take two years to complete the project and uses the number of labor hours to estimate the rate of completion. Macro Tech spends 30,000 hours in the first year of the contract and another 20,000 hours the second year. Required: Prepare the entries recorded by Macro Tech over the life of this contract. Assume that all payments are complete by the end of 2020.Mubashir Ali is negotiating his employment contract. His opportunity cost is 14%. He has been offered three possible 4-year contracts. Payments are in Pakistani rupees and are guaranteed, and they would be made at the end of each year. Terms of each contract are as follows: Contract Year 1 Year 2 Year 3 Year 4 Contract 1 4 Million 4 Million 4 Million 4 Million Contract 2 7 Million 1 Million 1 Million 1 Million Contract 3 9 Million 0.5 Million 0.5 Million 0.5 Million As his financial adviser, which contract would you recommend that he accept? Mubashir Ali is negotiating his employment contract. His opportunity cost is 14%. He has been offered three possible 4-year contracts. Payments are in Pakistani rupees and are guaranteed, and they would be made at the end of each year. Terms of each contract are as follows: Contract Year 1 Year 2 Year 3 Year 4 Contract 1 4 Million 4 Million 4 Million 4 Million…
- Damian is an entity which prepares financial statements, in accordance with International Financial Reporting Standards (IFRS), to 30 September each year. On 1 April 2018, Damian accepted delivery of a large and complex machine from a supplier. The agreed purchase price for the machine was £2 million. Damian received 10% trade discount. On 1 April 2018, Damian incurred direct costs of £50,000 in handling the machine and £25,000 in installing the machine at its premises. Although the machine was ready for use from 1 April 2018, Damian did not bring the machine into use until 30 April 2018. During April 2018 Damian incurred costs of £200,000 in training relevant staff to use the machine. The directors of Damian estimate that the machine is capable of being usefully employed in the business until 31 March 2023, and that it will have no residual value at that date. Damian uses the straight-line method for calculating the depreciation. On 31 March 2023, Damian will be legally required…Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $10,000 per month if he accepts the assignment. Assume that the maximum foreign-earned income exclusion for next year is $105,900. Return to question Item 3 Required information Skip to question [The following information applies to the questions displayed below.]Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $10,000 per month if he accepts the assignment. Assume that the maximum foreign-earned income exclusion for next year is $105,900. a-1. How much U.S. gross income will Fred report if he accepts the assignment abroad on January 1 of next year and works overseas for the entire year? b. Suppose that Fred's employer has offered Fred a six-month overseas assignment beginning on…Mr Ramu is a chief operating office of the company and being paid a salary of RM15,625 per month. His percentage portion for Employees Provident Fund contribution is 17%. He intent to buy a car worth RM290,000 and would be making a bank loan of RM100,000 to finance building an extension for his house kitchen. He also plans to bring his wife (housewife) and four children (two studying in a local university and the rest in secondary school) for an overseas holiday trip with an estimate cost RM15,000. He also plans to have a servant and a driver where he would be paying them with an annual salary of RM15,000 and RM24,000 respectively. His company is willing to prepared to restructure his remuneration package to accommodate the above needs. REQUIRED: (a) Explain how Mr Ramu’s remuneration package can be restructure on a more tax efficient basis based on the above information only. ( b) Based on (a), which are item (s) in the proposed remuneration package is/are taxable or exempted. (c)…
- According to the new renumeration scheme, the starting pay of a (b) technician is RM2029 per month and the annual increment is RM101. Ahmad who is 25 years old becomes a technician in a medium company. i. What will his monthly salary be when he is 45 years old? What will his age be when he gets a monthly payment of RM3847? ii.Phumlani of South Africa consigns 10 cases of goods costing $200 per case to Christian in Ghana on the 1 st July 2019. Phumlani ends his account on 31 st December of every financial year. a. Phumlani pays $250 for carriage and insurance for the whole consignment on 1 st July 2019. Phumlani receives an interim account sales with a bank draft from Christian on 28 th December 2019. It shows the following and all currencies converted into US dollars ($): b. Christian has sold 8 cases of goods for $400 each. c. Christian has paid a total of $150 for landing charges and import duties on receipt of the whole consignment. d. He paid selling costs in respect of the 8 cases sold amounting to $160. e. He has deducted his commission of 10% in respect of the 8 cases sold. f. Christian encloses a bank draft of $2,570 to the account sales. Phumlani now wishes to balance off his consignment account at his financial year end 31 st December 2019 and transfer the profit to date to his profit…Consider the following scenario in relation to your Notary, Loan Signing Agent and Marriage officiant practice in Hawaii and determine the opportunity cost of leaving your job to become an entrepreneur. You currently make $90,000 per year at your job plus benefits (equal to 30% of your salary). On January 1 of the New Year, you start your own business. After the first year, your accountant informs you that you made $45,000 and out of that you paid $6,000 for health insurance. What was your opportunity cost? If your opportunity cost is higher than you would like, how can you lower your opportunity cost in the future years?