You Have Been Approached by a New Client, Ms Belinda

question 10

Essay

You have been approached by a new client, Ms Belinda Nguyen to prepare her 2014 income tax return. At the interview, Belinda provides you with the following information to assist with the completion of her tax return:
$\begin{array}{lr}\text { Details } & \text { Amount }(\$) \\\text { Gross Salary } & 57,500 \\\text { PAYG tax instalments deducted } & 14,000 \\\text { Franked dividends } & 2,300 \\\text { Union fees } & 600 \\\text { Stationery } & 80 \\\text { Subscriptions } & 130 \\\text { Telephone expense (total) } & 280 \\\text { (Allocated as 30\% business) } &\end{array}$ a) Calculate Belinda's 2014 taxable income.
b) Calculate Belinda's 2014 net tax payable / refund including the medicare levy and any low income tax offset.
c) After adjusting to remove the PAYG tax instalments deducted and the non-cash adjustment for franked dividends as part of assessable income, calculate the average tax rate payable by Belinda for the 2014 year. Note that Average tax rate = Adjusted tax payable / Adjusted taxable income.

Distinguish between applied and pure research in psychology.

Understand the basic differences between forward contracts and futures contracts.

Comprehend the importance and use of derivatives in hedging financial risks.

Recognize the role of volatility in financial markets and its impact on derivatives trading.

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Definitions:

External Costs

Costs that are not borne by the parties involved in an economic transaction but are instead imposed on others or society.

Government Activities

Actions and operations conducted by the government including lawmaking, regulation, and public services.

Externality Rights

The rights pertaining to external effects of transactions, that affect third parties not directly involved in the economic transaction.

Government Imposed Taxes

Charges levied by the government on individuals, goods, services, or transactions to fund public expenditures.