Jenny Steward ran her own business as a personal trainer (PT). She charged clients in two ways – pay after each lesson or pay in advance for a period of 12 lessons. Jenny had an arrangement with Anytime Fitness to give lessons to members who wanted to take training lessons continually and new members who wanted a single lesson before using fitness equipment in the gym. Jenny charged on a single lesson basis for new members. She also had a number of clients who would book a series of 12 lessons. These clients have to pay for the 12 lessons in advance, although Jenny advised she would refund any amount where a client could not attend a lesson. As regards the 12 lessons, Jenny started classes at the beginning of March and commenced a new class each 3 months thereafter. At 30 June 2018, Jenny had received $6,000 from the giving of occasional lesson and $28,800 from the giving of 12-week lessons. The payment of 12-week lessons starting from 1 June 2018 was $7,800.
To prepare for a bodybuilding competition in Fiji, Jenny spent four months (July – October 2017) in Fiji training and working as a PT in a local gym. She won $5,000 in the competition and earned $8,000 working as a PT. In February 2018, Jenny accidentally damaged a treadmill in the gym while she was providing a training lesson. The value of treadmill was $500. The only way Jenny could afford was to have two people she was going to give lessons in the next 12 weeks (beginning in March) pay for the treadmill rather than pay their fees. Unexpectedly Jenny received a $1,000 from Doreen in June. Jenny had trained Doreen for a few years. Doreen recently won a major bodybuilding competition, and wanted to show her appreciation for Jenny’s excellent training.
Determine what amounts will form Jenny’s taxable income for the 2017/18 taxation year. Fully explain your answer.
