LEGT2751 Midsem Solutions
THE UNIVERSITY OF
NEW SOUTH WALES
AUSTRALIAN SCHOOL OF TAXATION AND BUSINESS LAW
LEGT 2751 BUSINESS TAXATION
MULTIPLIE CHOICE TEST S1 2011
DURATION: 40 MINUTES
READING TIME: 10 MINUTES
In each case choose the most correct answer.
Indicate your answer in pencil on the answer sheet provided.
Each question is worth one mark.
Candidates may bring an un-annotated copy of either: CCH Core Tax Legislation; ATP Fundamental Tax Legislation; or Lexis Nexis Concise Tax Legislation into the examination room. Post-it markers or other similar markers that do not have any writing on them may be placed on the legislation as marker tabs.
Electronic calculators may be brought into the examination room.
Mobile phones may be brought into the examination room but must be switched off and must be placed under your desk.
QUESTION ONE
Barry conducts a butcher shop in Gladesville. He purchases 10 whole sheep that have already been slaughtered for $110 each. He butchers the slaughtered sheep into various cuts such as chops, leg of lamb, shoulder of lamb and so on. His total sales receipts for the cuts from each slaughtered sheep are $440. His annual turnover is $76,000. This year he spent $4400 (GST inclusive) on new knives and chopping boards. The GST consequences for Barry of these transactions are:
(a) Barry is liable to be registered for GST. All the purchases are GST free and all the sales are GST free as purchases and sales of food. Hence Barry does not receive any input tax credits on the purchases and is not liable for GST on his sales.
(b) Barry is liable to be registered for GST. The purchase of the slaughtered sheep carcasses is GST free as a purchase of food. Barry receives an input tax credit on the purchase of the knives and the chopping boards of $4400 x 10/11 x 10% = $400. However, the input tax credits cannot be refunded to Barry as his sales are GST free.
(c) Barry is liable to be
NEW SOUTH WALES
AUSTRALIAN SCHOOL OF TAXATION AND BUSINESS LAW
LEGT 2751 BUSINESS TAXATION
MULTIPLIE CHOICE TEST S1 2011
DURATION: 40 MINUTES
READING TIME: 10 MINUTES
In each case choose the most correct answer.
Indicate your answer in pencil on the answer sheet provided.
Each question is worth one mark.
Candidates may bring an un-annotated copy of either: CCH Core Tax Legislation; ATP Fundamental Tax Legislation; or Lexis Nexis Concise Tax Legislation into the examination room. Post-it markers or other similar markers that do not have any writing on them may be placed on the legislation as marker tabs.
Electronic calculators may be brought into the examination room.
Mobile phones may be brought into the examination room but must be switched off and must be placed under your desk.
QUESTION ONE
Barry conducts a butcher shop in Gladesville. He purchases 10 whole sheep that have already been slaughtered for $110 each. He butchers the slaughtered sheep into various cuts such as chops, leg of lamb, shoulder of lamb and so on. His total sales receipts for the cuts from each slaughtered sheep are $440. His annual turnover is $76,000. This year he spent $4400 (GST inclusive) on new knives and chopping boards. The GST consequences for Barry of these transactions are:
(a) Barry is liable to be registered for GST. All the purchases are GST free and all the sales are GST free as purchases and sales of food. Hence Barry does not receive any input tax credits on the purchases and is not liable for GST on his sales.
(b) Barry is liable to be registered for GST. The purchase of the slaughtered sheep carcasses is GST free as a purchase of food. Barry receives an input tax credit on the purchase of the knives and the chopping boards of $4400 x 10/11 x 10% = $400. However, the input tax credits cannot be refunded to Barry as his sales are GST free.
(c) Barry is liable to be