Mr Dominic Supreme owns a pizza restaurant. However, for public health reasons he has now closed the
restaurant side of the business and is currently operating on a takeaway basis only. He has several employees
working in the kitchen and delivering pizzas. He also owns various assets, including a rental property.
Enzo is Dominic’s head chef and he is provided with the use of a Toyota RAV4 motor car as well as his salary of
$100,000 per year. The car was purchased by Dominic on 1 April 2018 for $55,000. Dominic has not made the
election under section 10 of the Fringe Benefits Tax Assessment Act. Enzo travelled 10,000 km in the car during
the FBT year ended 31 March 2019 and, of this, 4,000 km were for business purposes. Enzo paid for the petrol
for the car and this amounted to $900 for the FBT year ended 31 March 2019. Enzo was not reimbursed for the
petrol.
Maria is Dominic’s store manager and she was given an interest free loan of $500,000 by Dominic on 1 January
2019. Maria used the loan for two purposes: 60% for the purchase of an investment property and 40% to pay
off her home mortgage.
Because of the current health crisis, Dominic pays the private health insurance premiums of all his staff and
these premiums were $55,000 for the year ended 31 March 2019.
Dominic purchased a rental property on 1 July 2018 for $1,200,000. To finance this purchase, he borrowed $1
million from Megabank at an interest rate of 5%. To arrange for the loan Dominic paid a total of $4,000 for a
loan application fee, a valuation fee and legal fees on 1 July 2018. He also paid stamp duty of $52,000 and
$3,200 in legal fees in connection with the purchase of the property.
In August 2018 Dominic fixed the door to the rental property which was broken at the time of his purchase for a
cost of $900. He also purchased new refrigerator for the rental property of $3,000 on 1 November 2018. The
useful life of the refrigerator is 10 years. Dominic replaced the entire roof of the rental property in October
2018 at a cost of $35,000 after it was severely damaged in a hailstorm in September 2018. He used substantially
the same type of material that was there before.
On 10 June 2019 he sold the rental property for $1,500,000. The costs he incurred on the sale were $30,000 for
real estate agent’s commission and $2,000 for advertising. He also sold the refrigerator on 10 June 2019 for
$2,000. With the proceeds of the property sale, Dominic repaid his loan from Megabank on the date of sale.
Dominic purchased some BHP Billiton Limited shares in May 1990 for $50,000 and then sold them in May 2019
for $100,000. He purchased an antique clock for $600 in June 2000 and sold it in June 2019 for $4,000. Dominic
also sold his Mercedes sports car in April 2019 for $60,000 which he purchased in April 2001 for $20,000.
Dominic wants to maximise his deductions at all times. Assume that Dominic can claim GST input tax credits for
the provision of all fringe benefits he provides apart from the loan.
Required:
Part 1 (10 marks)
What fringe benefits tax (FBT) must Dominic pay for the year ended 31 March 2019?
Part 2 (10 marks)
What is Dominic’s net capital gain or net capital loss for the year ended 30 June 2019?
Part 3 (10 marks)
What income tax deductions can Dominic claim for the year ended 30 June 2019?
Please note: Students must give reasons for their answer. This discussion must include an analysis of the
pertinent sections of the relevant legislation, rulings and the relevant case law. If relevant, students must show
calculations.
Corpus Christi Freight Transport, Inc. Quentin Hershey is a customer relations representative for Corpus Christi Freight Transport, Inc., a large shipping company headquartered in Corpus Christi, Texas, and with offices in Argentina and Sydney. He wants you to help him create a PowerPoint presentation to explain features of the company and the services it offers. Quentin wants to give the presentation to organizations that require shipping services to U.S. waterways and to foreign ports. Complete the following steps: 1. Create a new presentation using the Striped black border presentation template from Office.com. (Hint: Use striped black border as the search term. If you get no results, type white as the search term, and then choose a template with a simple theme.) 2. Replace the title text on the title slide with Corpus Christi Freight Transport, Inc. and replace the subtitle text with your name. Save the presentation as Freight Transport to the drive and folder where you are storing your files. 3. Delete all the slides except the title slide. 4. Add a new Slide 2 with the Two Content layout. Type Who We Are as the title, and then type the following as a bulleted list in the left content placeholder: • International shipping company • Licensed by Federal Maritime Commission • Bonded as international freight transporter • Registered as cosmetic freight forwarder 5. On Slide 2, in the right content placeholder, insert the photo Freight, located in the PowerPoint1 Case4 folder included with your Data Files. Resize it, maintaining the aspect ratio, so it is 4.8 inches high, and then reposition it as needed so that the middle of the photo and the middle of the bulleted list text box are aligned. 6. Add a new Slide 3 with the Title and Content layout. Type Online Scheduling as the title, and then type the following as a bulleted list in the content placeholder: • Register at www.freight.example.com • Enter type and amount • Submit information • Receive confirmation within 24 hours 7. On Slide 3, remove the link formatting from the website address in the first bulleted item. 8. On Slide 3, convert the bulleted list to a SmartArt diagram with the Vertical Picture List layout, which is a List type of diagram. 9. Change the colors of the diagram to Colored Fill – Accent 3 by using the Change Colors button in the SmartArt Styles group on the SMARTART TOOLS DESIGN tab. 10. Insert the following pictures, located in the PowerPoint1 Case4 folder, in the picture placeholders in the SmartArt diagram, in order from top to bottom: URL, Cargo, Submit, and Woman. 11. Add a new Slide 4 with the Two Content layout. Type U.S. Office as the title. In the content placeholder on the left, type the following as an unnumbered list without extra space between the lines: Corpus Christi Freight 2405 Shoreline Road Corpus Christi, TX 78401 12. On Slide 4, add the phone number (361) 555-1254 and the website address www.freight.example.com as new items in the unnumbered list. Press the spacebar after typing the website address to format it as a link. 13. On Slide 4, add the photo Corpus Christi, located in the PowerPoint1 Case4 folder, to the content placeholder on the right. Resize it so it is 3.9 inches high, maintaining the aspect ratio, and then position it so the top edge aligns with the top edge of the text box on the left and there is approximately one inch of space between the right side of the photo and the right edge of the slide. 14. Compress all the photos in the presentation to 96 ppi, and then save the changes. 15. Add a new Slide 5 with the Comparison layout. Type How Are Containers Loaded? as the title, type First a container is selected in the small text placeholder on the left, and then type Then it is transported to the ship and loaded in the small text placeholder on the right. Move this slide so it becomes Slide 4. 16. On Slide 4 (“How Are Containers Loaded?”), insert the video Loading1, located in the PowerPoint1 Case4 folder, in the left content placeholder, and insert the video Loading2, located in the same folder, in the right content placeholder. (The video objects might be filled with black when they are inserted.) 17. Open the Info tab in Backstage view. Use the Compress Media command to compress the videos to the lowest quality possible. Use the Back button at the top of the navigation bar in Backstage view to return to Normal view. 18. Run the slide show in Slide Show view. When Slide 4 (“How Are Containers Loaded?”) appears, point to each video to make a Play button appear, and then click the Play button to play each video. Note that there is no sound in the videos. (Hint: Point to the video as it plays to display the play bar again.)
April 8, 2022
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