Peter Piper is a resident and is employed as a part-time pocket billiards (i.e. pool) instructor. He also
owns a business, Peter Piper’s Pool, which sells pool tables and equipment, and is a partner with Frank
in a lucrative business, Pooled Resources, that buys old pool tables and refurbishes them for resale.
As an instructor Peter was paid a gross salary of $63,000 during the 2014/15 income year. He also made
a net capital gain of $30,000 from the sale of an old pool table that he had purchased for himself 2 years
ago. He is a shareholder in a company and received a partly franked dividend of $7,000 which had
$1,000 of franking credits allocated to it. He is also a beneficiary of The Piper Family Trust. Personally.
Peter is entitled to the following deductions: $800 (for the cost of a seminar he attended on Honing Your
Pool Skills ), $700 (for the decline in value of a computer he uses for work-related matters), $560 (for
repairs to the pool cues he lends to students attending his classes), $540 (for fees charged by his
accountant for the preparation of his tax return for the previous income year), and $300 (donation to a
charity that is a registered as a deductible gift recipient in payment of which Peter receives 6 tickets in a
car raffle). Peter has paid for private health insurance for him and for his wife for the whole income year
which cost him $4,000. PAYG withheld on Peter’s behalf amounted to $15,500.

In his business Peter uses the accruals basis of accounting. He provides you with the following
information for the year ended 30/6/2015. All amounts exclude GST.
Receipts $
Cash sales 515,000
Debtors (for credit sales, including the $10,000 owing at 30/6/2014) 100,000
Insurance proceeds: damaged stock 7,000
Insurance proceeds: storm damage to broken windows and carpets 13,000
Bank loan to make alterations to the store (Funds were borrowed on
1/10/2014. The loan is due for repayment on 30/9/2019.)
33,000
Bad debt recovered (debt written off in 2013/14) 1,000
Payments
Cash purchases 80,000
Creditors (for credit purchases, including the $23,000 owing at 30/6/2014) 215,000
PAYG instalments 41,500
Council rates – business 6,000
Legal expenses in relation to the bank loan 2,000
Entertainment of suppliers and large customers 1,660
Repairs after storm damage to windows and carpets 12,000
Staff wages 80,000
Superannuation for staff 7,600
Alterations to the store (Note 1) 45,000
Cash drawings 90,000
Advertising (Note 3) 7,000
Other deductible expenditure 10,000
Stock on hand at 1/7/2014: $16,000; 30/6/2015: $19,000
Debtors at 1/7/2014: $10,000; 30/6/2015: $6,000
Creditors at 1/7/2014: $23,000; 30/6/2015: $25,000
Note 1: The alterations commenced on 1/9/2014 and were completed on 30/11/2014.
Note 2: Motor vehicle expenses, including decline in value, were $12,800. A log book kept for 12
weeks in 2014 showed business usage of 45%. Peter uses the log book method.
Note 3: Peter’s records showed that he had taken cues from stock which had cost $4,170.
Note 4: Peter advertises his store at the local movie-theatre. He entered into an eighteen-month
contract on 1/5/2015 that cost $7,000. The amount pre-paid at 30/6/2014 on a previous contract
was $4,000. This contract expired on 31/10/14.
Required:
Showing all workings, calculate the net income of the business

Do you want your assignment written by the best essay experts? Then look no further. Our teams of experienced writers are on standby to deliver to you a quality written paper as per your specified instructions. Order now, and enjoy an amazing discount!!