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FNSTPB402 Establish and Maintain a Payroll System Assessment 2 Answer

Details of Assessment
Assessment No2Assessment Weighting30%
Details of Unit(s) of competency
Unit Code (s) and NamesFNSTPB401 Complete business activity and instalment activity statement tasks


FNSTPB402 Establish and maintain a payroll system


Answer

Question 1 –FBT & Superannuation (4 marks)

  1. How does a business report and pay FBT to the ATO? (1 mark)
  2. What is the difference between a GST Free Sales and Input Taxed Sales? (1 marks)
  3. Are Superannuation Guarantee amounts subject to GST? (1 mark)
  4. Are Superannuation Guarantee amounts reported in the BAS? (1 mark)

Question 2 – Lodge Activity Statement (4 marks)

You are the assistant accountant and it is your role to prepare the BAS of the business.  You are not an authorised person. However, your immediate manager is the financial controller who is also the public officer of the company. 

You have prepared the BAS statement and it’s ready for lodgement. 

Required:

  1. Can you sign off the BAS?  (2 marks)
  2. You have just found out that your manager has left for overseas for 3 days and the BAS is due tomorrow. Who will sign the BAS and lodge it? (2 marks)

Question 3– GST Classifications (16 marks)

All supplies fall into the following categories, regardless whether they are inputs or outputs:

  • Taxable (10% rate) (4 marks)
  • GST free (zero rated) (4 Marks)
  • Input taxed (no rate) (4 Marks)
  • Exempt (4 Marks)

Required:

Indicate with an ‘X’ which category the following supplies fall into:

Supply
Taxable
(10% rate)
GST-free
(zero rated)
Input taxed
(no rate)
Exempt

Wages or Superannuation paid or received


X
All supplies out for exported goods or services
X

Residential rent income or expenses

X
Money (lent, borrowed, accounts)

X
Domestic water sales
X

Purchase or sale of an assetX


Commercial rent income or expensesX


Childcare & education
X

Depreciation


X
Council rates
X

Question 4– BAS Case Study (28 marks)  

Do not deduct mark for consequential errors.

Boosting Sales is registered for GST as a cash payer and has chosen to report and calculate its GST every quarter. As a bookkeeper, part of your job description is to complete the quarterly BAS (under the direction of your client’s tax agent). 

Required: 

The following was extracted from the accounts for the quarter ended 31December 2016. 

Complete the followings:

a)   GST Classification Worksheet for BAS purposes (12 Marks)

b)   GST Calculation Worksheet for BAS purposes (12 Marks)

c)    When is the payment due date? (2 Marks)

d)    Enter the journal entry to process the payment. (2 Marks)

Note: All values are GST inclusive (wherever applicable)

SUMMARY$
Sales of goods and services440,000
Export sales7,700
Other GST-free sales6,600
Commercial Rent 99,000
Residential Rent 22,000
Sale of Assets 5,500
General Business Expenses220,000
Business Council & Water Rates 2,200
Depreciation4,400
Commercial Rent Expenses 9,900
Residential Rent Expenses4,400
Purchase of Fax Machine2,200
Wages & Salaries88,000
Superannuation7,920 
PAYG tax withheld25,000

a) GST Classification worksheet 0kay

Outputs:

Account DetailsOutputsTaxableExportsGST- FreeInput TaxedExcluded
Sale of goods & services440,000440,000    
Export Sales7,700 7,700   
Sale of assets5,5005,500    
Other GST-free sales6,600  6,600  
Commercial Rent99,00099,000    
Residential Rent22,000   22,000 
TOTALS580,800544,5007,7006,60022,0000
GST Classification Worksheet ReferenceG1G6G2G3G4 

Inputs: okay

Account DetailsInputsCapital PurchasesNon Capital PurchasesTaxable SupplyInput TaxedGST FreeExcluded
General Business expenses220,000 220,000220,000   
Business council & water rates2,200 2,200  2,200 
Depreciation4,400     4,400
Commercial rent expenses 9,900 9,9009,900   
Residential rent expenses 4,400 4,400 4,400  
Purchase of Fax Machine 2,2002,200 2,200   
Wages & salaries88,000     88,000
Superannuation7,920     7,920
PAYG Withholding25,000     25,000
TOTALS364,0202,200236,500232,1004,4002,200125,320
GST Classification Worksheet Reference G10G11G17G13G14Excluded
G1Total Sales (including any GST)

580,800
G10Capital Purchases (including any GST)2,200
G2

Exports

7,700
G11Non-Capital Purchases (including any GST)236,500
G3Other GST –Free Sales6,600G12G10 + G11238,700
G4Input Taxed Sales22,000G13Purchases for making Input Taxed Sales4,400
G5G2 + G3 + G436,300G14Purchases without GST in the price2,200
G6Total Sales subject to GST (G1 minus G5)544,500G15Estimated Purchases for Private Use or not Income Tax Deductible0
G7Adjustments (if applicable)
G16G13 + G14 + G156,600
G8Total Sales subject to GST after Adjustments (G6 +G7)544,500G17Total Purchases subject to GST (G12 minus G16)232,100
G9GST on Sales (G8 divided by eleven)49,500G18Adjustments (if applicable)0



G19Total Purchases subject to GST after Adjustments (G17 + G18)232,100



G20GST on Purchases (G19 divided by eleven)21,100

NET GST PAYABLE 
(G9  minus G20)
28,400


b) GST Calculation Worksheet for the quarter ended 31 December 2014:

c) Payment due date:28 February 2017

d) Journal entry to record the payment:

DateParticularsDebit ($)Credit ($)
28/02/2017GST28,400
28/02/2017CASH
28,400

Question 5 – PAYG WITHHOLDING (8 marks)

Below is an extract from weekly tax tables.

Weekly earningsWith tax-free threshold No tax free-free threshold
($) ($) ($)
40611.0094.00
40711.0095.00
40812.0095.00
40912.0095.00
41012.0096.00

The correct amount of tax to withhold (if any) from a resident employee earning $409 per week, who has not quoted a TFN but has requested the tax-free threshold is 

4.7% deduction 

The correct amount of tax to withhold (if any) from a resident employee earning $408 per week, who has quoted a TFN and requested No tax-free threshold 

95,00

The correct amount of tax to withhold (if any) from a resident employee earning $410 who has quoted a TFN and requested the tax-free threshold

12.00

The correct amount of tax to withhold (if any) from a non-resident employee earning $407 who has quoted a TFN.

95,00


Question 6– Cashflow (8 mark)

Jumping Jacks Pty Ltd has provided an extract of their forecasted cash flow and you have prepared the BAS for the September quarter, the payment due as shown on the BAS is $30,000.

Extracted forecasted cash flow


SeptemberOctoberNovemberDecember
Estimated Closing bank balance$20,000($50,000)($40,000)$10,000

Required: 

  1. Jumping Jack’s Pty Ltd reports and pays GST quarterly. From the above information what would you bring to the attention of your client regarding the payment of the $30,000 shown on the BAS? (4 Marks)
  2. What action could Jumping Jack’s Pty Ltd take to meet their BAS payment obligations? (4 Marks)

Question 7–PAYG Instalments (8 marks)

Rinaan Little operates a small business and receives investment income. She accounts for GST and PAYG Instalments on a cash basis, reports GST annually and reports PAYG instalment income quarterly.

This is a list of revenue (GST inclusive where applicable) received for the October - December 2016 quarter by Rinaan Little:

Sales$  66,000
Commercial rent received$  33,000
Residential rent received$    7,700
Interest received $    1,100
Dividend income $    3,300
Sale of business printer (*asset )$    2,200
Bank Loan – Bank of Australia$    4,400
Total Revenue$96,900

Required:

  1. Calculate the PAYG instalment income.
  2. Calculate the PAYG income tax instalment assuming a PAYG income tax instalment rate of 6.20%
  3. Prepare the Instalment Activity Statement for the quarter using option 2.

(a)


Amount including GSTPAYG Instalment Income
Sales

Commercial rent received 

Residential rent received

Interest received

Dividend income

Sale of business printer

Bank Loan – Bank of Australia

Total income

(b)

PAYG Instalment income


(c) Complete the required BAS labels below:

Question 8 Adjustments (6 marks)

You are given some unrelated examples of errors/ omissions that were made on prior BAS reports. Advise whether they are errors requiring lodgement of a Revised Activity Statement or adjustments (increasing / decreasing) to account for when lodging the next BAS.

Error / OmissionSelect one appropriate solution from the following:
  • Lodgement of revised activity due to Error
  • Increasing Adjustment
  • Decreasing Adjustment
A sale of $1,100 from the last quarterly BAS was recorded as GST-free
A previous purchase of $14,000 included in a prior BAS has been cancelled
An amount of $50 discount provided to customers


Question 9– Handle Payroll Queries (10 marks)

  1. An employee has contacted you requesting details of his total superannuation payments.  His wife also works for the same company and he also requested, on behalf of his wife, details of her total superannuation payments. He would like a total year to date figure for him and his wife.

What advice would you provide?

  1. An employee asked you, "How the Superannuation Guarantee is calculated?"
  2. An employee’s mother has passed away.

How much compassionate leave are they entitled to?

  1. An employee asked you, "Payroll records must be kept for what period of time?"
  2. A casual employee asked you, "What is the casual rate loading?"
All the details are private, and we can give any details without permission 
To have the access to superannuation 
2 day 
7 year We have the access to payroll register  records 


Question 10 – Processing Payroll(8 marks)

PAYROLL REGISTER
for Week Ending 30 June
EntitlementsD. CameronF. SmithP. AdamsC. BorderTotal
Ordinary Hours WorkedNil$1,995.00$1,904.00$1,500.00$5,399.00
Personal Leave HoursNilNil$476.00$1,000.00$1,476.00
Overtime Hours (x1.5)Nil$256.50NilN/A$256.60
Overtime Hours (x2.0)Nil$114.00NilNil$114.00
AllowancesNil$20NilNil$20.00
Annual Leave$2,400.00NilNilNil$2,400.00
Annual Leave Loading$420.00NilNilNil$420.00
GROSS PAY$2,820.00   $2,385.50$2,380.00$2,500.00$10,085.50
Deductions
PAYG Withholding$869.00$699.00$697.00$744.00$3,009.00
Social Club$2.00$2.00$2.00$2.00$8.00
UnionNil$5.00$5.00Nil$10.00
Total Deductions $871.00$706.00$704.00$746.00$3,027.00
NET PAY$1,949.00$1,679.50$1,676.00$1,754.00$7058.50


Hourly Pay Rates
D. CameronF. SmithP. AdamsC. Border
$57.00 per hour$57.00 per hour$42.00 per hour$50.00 per hour


Complete the Pay Advice Slip for C. Border for the week ending 30 June.  


Pay Advice Slip
Employer: Sam Waterford
Employer’s ABN: 11 111 111 111 
Employee: C Border
Week ending:  30 June
Date of Pay: 30 June
EARNINGSHourly RateHours$
Normal$50301,500
O/Time 1.5


O/Time 2.0


Personal Leave$50201000
Annual Leave


First Aid Allowance


Gross Pay

2,500
PAYG Tax

(744)
DEDUCTIONS


Social Club

(2,00)
Super

142.50
Union


Net Pay

$1754
Super fund Name:Sun SuperfundAmount      


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