Description
Don′t understand how to set up the sales journal, and sales return journal and how to do the GST adjustments for both the form IR 372 and IR 101.I need question 1 and 2 done, as well as adjustment of IR372 AND IR 101 file.
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1
ACCTN306-23B (HAM) TAXATION
Final Taxation Assignment
Instructions:
•
The assignment consists two questions and you are required to answer both questions.
•
The assignment is a team effort. Each team comprises of 3 students and must only
make one submission. Please state the names and students’ ID numbers of all members
of the team in the submission.
•
Show all workings. Please note that you may lose marks if your answer is not supported
by relevant workings.
•
Round up all figures to the nearest 2 decimal points
•
The assignment must be processed in word document format (no other format will be
accepted, excel format will not be accepted) and use the IRD Returns provided in the
assignment. The assignment must be moodle submitted on or before 12 noon 27
October 2023.
•
Please ensure that your assignment is formatted in proper manner to enable printing
of the document.
•
A penalty of 30% will be deducted on assignments submitted after 12 noon 27 October
2023. Assignments submitted after 48 hours of the due will not be accepted.
•
Please note that your submitted assignment will be processed by the Turn-it-in
programme to detect any plagiarism. Any issues of plagiarism will be taken up for
Disciplinary Action and the student(s) affected may receive a zero mark for the
assignment and/or receive a fail grade for the paper.
1
2
•
Attach the following cover page:
•
•
•
WMS Assignment Cover Sheet
Family Name
Student ID Number
1.
2.
3.
First
Name
1.
2.
3.
Paper Code:
Group
Team
Assignment Name
Final Assignment
Due Date
27 October 2023
•
1.
2.
3.
Attach the following after the cover page:
Names and Student ID of Team Participants: 1.
Items
Marks allocated
1(a)(i) Sales Journal
10
1(a)(ii) Sales Returns Journal
6.5
1(a)(iii) Purchases Journal
10
1(a)(iv) Purchases Returns Journal
3.5
1 (b) IR372
10
1 (c ) GST101A
30
2 (a) IR10
15
2 (b) IR4
15
TOTAL
100
2
2.
3
Marks Scored
3
Question 1 (70 Marks)
Suntex Limited is GST registered company and has chosen the invoice basis for the two
monthly GST taxable period ending 31 March 2023. The company is involved in several
business activities including: purchase and sales of goods and services both in New Zealand
and overseas; land transactions; property investments; and other business activities. The details
of the company are as follows:
•
•
•
•
Name of Company: Suntex Limited
Postal Address: 98, Grey Street, Hamilton
GST Registration: 123-321-483
Bank Details: Bank ABC No. 03-08960-010423618-00
The following information relates to the two monthly taxable period ended 31 March 2023:
• Appendix A: List of credit transactions
• Appendix B: Bank Ledger Account
• Appendix C: Additional information
Required:
Prepare for Suntex Limited:
(a) The following records which can be used as a basis for preparing GST returns for the two
monthly taxable period ended 31 March 2023 (Customers’ and Vendors’ details not required):
(i) Sales Journal
(ii) Sales Returns Journal
(iii)Purchases Journal
(iv) Purchases Returns Journal
(b) GST Adjustment Calculations Sheet IR 372 for the taxable period ended 31 March 2023.
You are required to prepare detail workings to support each item of GST adjustments. Use
the form provided in the link below:
https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir300–ir399/ir372/ir372-2010.pdf?modified=20200512000525&modified=20200512000525
(c ) Goods and Services Tax Return GST 101A for the taxable period ended 31 March 2023.
You are required to prepare detail workings to support each item in the GST 101A Return.
Use the form provided in the link below:
https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/gst100–gst199/gst101a/gst101a-2017.pdf
3
4
Appendix A
Date
2 Feb.
2 Feb.
2 Feb.
2 Feb.
2 Feb.
3 Feb.
3 Feb.
3 Feb.
5 Feb.
5 Feb.
5 Feb.
6 Feb.
7 Feb.
7 Feb.
7 Feb.
8 Feb.
10 Feb.
11 Feb.
12 Feb.
12 Feb.
13 Feb.
14 Feb.
14 Feb.
15 Feb.
15 Feb.
17 Feb.
17 Feb.
19 Feb.
19 Feb.
21 Feb.
21 Feb.
21 Feb.
21 Feb.
22 Feb.
23 Feb.
23 Feb.
25 Feb.
25 Feb.
25 Feb.
26 Feb.
27 Feb.
27 Feb.
28 Feb.
28 Feb.
Reference
Invoice AO1010
Invoice AO1011
Credit Note 99
Invoice ABC 6641
Invoice AO1012
Credit Note 6441
Invoice AOE321
Invoice XYZ 3363
Invoice AOE322
Invoice CHI4988
Invoice AO1014
Invoice AO1015
Invoice AOE323
Credit Note 100
Invoice AO1016
Invoice MNP5318
Invoice AO1017
Invoice AO1018
Credit Note 101
Invoice AO1019
Credit Note 2108
Invoice AOE324
Invoice AO1020
Invoice AO1021
Invoice IND8344
Credit Note 102
Invoice AO1022
Invoice AOE325
Invoice AO1023
Invoice KKL2346
Credit Note 103
Invoice AO1024
Credit Note 104
Invoice AO1025
Invoice AO1026
Credit Note 1242
Credit Note 105
Invoice AO1027
Invoice US4180
Invoice AOE326
Invoice AOE327
Credit Note 106
Invoice AO1028
Invoice KKM9928
Transaction
Credit Sales (GST Exclusive)
Credit Sales (GST Exclusive)
Sales Returns (GST Inclusive) Invoice AO1010
Credit Purchases (GST Exclusive)
Credit Sales (GST Exclusive)
Purchases Returns (GST inclusive) Invoice RSQ481
Export Sales (GST Exclusive)
Credit Purchases (GST exclusive)
Export Sales (GST Exclusive)
Import Supplies (GST exclusive)
Credit Sales (GST Exclusive)
Credit Sales (GST Exclusive)
Export Sales
Sales Returns (GST Inclusive) Invoice AO1012
Credit Sales (GST Exclusive)
Credit Purchases (GST Exclusive)
Credit Sales (GST Exclusive)
Credit Sales (GST Exclusive)
Sales Returns (GST Inclusive) Invoice AO1015
Credit Sales (GST Exclusive)
Purchases Returns (GST inclusive) Invoice VVW2108
Export Sales
Credit Sales (GST Exclusive)
Credit Sales (GST Exclusive)
Import Supplies (GST exclusive)
Sales Returns (GST Inclusive) Invoice AO1020
Credit Sales (GST Exclusive)
Export Sales
Credit Sales (GST Exclusive)
Credit Purchases (GST Exclusive)
Sales Returns Invoice AOE324
Credit Sales (GST Exclusive)
Sales Returns AOE325
Credit Sales (GST Exclusive)
Credit Sales (GST Exclusive)
Purchases Returns (GST inclusive) Invoice CCD1115
Sales Returns (GST Inclusive) Invoice AO1025
Credit Sales (GST Exclusive)
Import Supplies (GST exclusive)
Export Sales
Export Sales
Sales Returns (GST Inclusive) Invoice AO1027
Credit Sales (GST Exclusive)
Credit Purchase (GST exclusive)
4
7,425.00
18,562.50
2,846.25
37,125.00
22,275.00
2,277.00
29,700.00
22,275.00
185,625.00
141,075.00
44,550.00
85,387.50
66,825.00
17,077.50
18,562.50
70,537.50
25,987.50
17,820.00
35,862.75
26,730.00
20,493.00
89,100.00
22,275.00
13,365.00
40,095.00
5,123.25
22,275.00
129,195.00
10,246.50
116,325.00
68,062.50
49,500.00
55,687.50
51,975.00
29,700.00
35,578.13
16,394.40
54,450.00
111,375.00
55,687.50
61,875.00
14,231.25
24,750.00
16,087.50
5
Appendix A (continued)
Date
28 Feb.
28 Feb.
3 Mac.
7 Mac
Reference
Invoice ZZX3448
Invoice AOE328
Invoice JJJ2255
Credit Note 107
11 Mac
13 Mac
15 Mac
19 Mac
20 Mac
21 Mac
23 Mac
24 Mac
25 Mac
25 Mac
26 Mac
27 Mac
28 Mac
31 Mac
31 Mac
31 Mac
Credit Note 8122
Invoice AO1029
Debit Note 481
Invoice POT512
Invoice AO1030
Credit Note 108
Invoice SSA333
Invoice AO1031
Invoice AO1032
Invoice AO1033
Invoice AOE329
Credit Note 888
Invoice DDA26
Credit Note 109
Credit Note VV4
Invoice AOE330
Transaction
Credit Purchases (GST Exclusive)
Export Sales
Credit Purchases (GST Exclusive)
Correction of Sales billing (GST exclusive) Invoice
AO1028
Purchases Returns (GST inclusive) Invoice JJJ2255
Credit Sales (GST Exclusive)
Correction of Sales Billing Invoice AOE328
Credit Purchases (GST Exclusive)
Credit Sales (GST Exclusive)
Sales Returns (GST Inclusive) Invoice AO1029
Credit Purchases (GST Exclusive)
Credit Sales (GST Exclusive)
Credit Sales (GST Exclusive)
Credit Sales (GST Exclusive)
Export Sales
Purchases Returns (GST inclusive) Invoice GGF100
Credit Purchases (GST Exclusive)
Sales Returns (GST Inclusive) Invoice AO1032
Purchases Returns (GST inclusive) Invoice CAL36
Export Sales
5
49,500.00
56,925.00
29,700.00
4,950.00
8,538.75
34,031.25
10,701.90
16,632.00
37,224.00
6,375.60
12,672.00
22,176.00
19,404.00
21,562.50
27,205.20
19,126.80
19,800.00
9,108.00
5,464.80
36,432.00
6
Appendix B
Date
1/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
28/2
1/3
31/3
31/3
31/3
31/3
31/3
31/3
31/3
31/3
31/3
31/3
Details
Balance b/d
Cash Sales
Trade Debtors NZ
Trade Debtors Exports
Government Wage Subsidies
(Note 6)
Rent on Residential Property
Lay By Sales (Note 27)
Internet sales overseas buyers
Bank interest on term deposits
Professional services overseas
Internet Sales to New Zealand
Customers
Professional services (Note 9)
Bank Charges
Maintenance
Office Rent (Note 5)
Electricity
Cash Purchases
Trade Creditors NZ
Trade Creditors Imports
Telephone and Broadband
Salaries
PAYE IRD
Bank Interest
Stationary
Loan Repayment
Motor vehicle expenses
Entertainment expenses (Note
11)
Bank interest
Motor Vehicle (Note 12)
Insurance on vehicles
Balance b/d
SAFE Insurance (Note 17)
International development
grants (Note 7)
Cash Sales
Trade Debtors NZ
Trade Debtors Exports
Rent on Residential Property
Internet sales overseas buyers
Bank interest on term deposits
Professional services overseas
Internet Sales to New Zealand
Customers
6
Debit ($)
0.00
170,775.00
370,012.50
532,077.98
Credit ($) Balance ($)
0.00
89,100.00
0.00
259,875.00
0.00
629,887.50
0.00 1,161,965.48
249,046.88
74,230.20
19,923.75
184,892.40
15,654.38
108,157.50
0.00
0.00
0.00
0.00
0.00
0.00
1,411,012.36
1,485,242.56
1,505,166.31
1,690,058.71
1,705,713.09
1,813,870.59
28,462.50
17,305.20
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
43,149.15
55,786.50
47,817.00
9,108.00
132,350.63
118,233.23
111,003.75
4,440.15
31,878.00
10,531.13
14,800.50
5,692.50
64,350.00
3,643.20
1,842,333.09
1,859,638.29
1,816,489.14
1,760,702.64
1,712,885.64
1,703,777.64
1,571,427.01
1,453,193.78
1,342,190.03
1,337,749.88
1,305,871.88
1,295,340.75
1,280,540.25
1,274,847.75
1,210,497.75
1,206,854.55
0.00
0.00
0.00
0.00
0.00
11,385.00
68,594.63 1,138,259.92
29,031.75 1,109,228.17
96,772.50 1,012,455.67
33,585.75
978,869.92
0.00
978,869.92
0.00
990,254.92
285,421.95
188,137.13
145,158.75
355,325.85
74,230.20
126,999.68
17,248.28
144,191.03
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1,275,676.87
1,463,814.00
1,608,972.75
1,964,298.60
2,038,528.80
2,165,528.48
2,182,776.76
2,326,967.79
212,842.58
0.00 2,539,810.37
7
Appendix B continued
Date
31/3
31/3
31/3
31/3
31/3
31/3
31/3
31/3
31/3
31/3
31/3
Details
Debit ($)
Penalty interest on late
payment of income taxes
0.00
Trade payment (Note 32)
30,170.25
Computer Equipment (Note
10)
0.00
Legal Fees (Note 18)
0.00
Infringement fees issued by
Hamilton City Council
0.00
Dishonored cheque (Note 24)
0.00
Donation (Note 8)
0.00
Entertainment Expenses
(Note 11)
0.00
Branch Operations (Note 19)
122,047.20
Farm Stay (Note 23)
45,540.00
Sale of land to Sally (Note 21) 128,081.25
Credit ($)
Balance ($)
72,237.83 2,467,572.54
0.00 2,497,742.79
45,824.63 2,451,918.16
18,216.00 2,433,702.16
31,878.00 2,401,824.16
38,822.85 2,363,001.31
53,623.35 2,309,377.96
47,703.15 2,261,674.81
0.00 2,383,722.01
2,429,262.01
2,557,343.26
Appendix C
1) All imported supplies are used for taxable activities.
2) The company has obtained approval form the Commissioner of IRD to use the payment
basis for the two monthly taxable periods commencing 1 April 2023.
3) The following sales invoices have not been settled as at 31 March 2023:
Invoice AO846 $27,225 (GST Exclusive)
Invoice AO953 $13,860 (GST Exclusive)
Invoice AO997 $22,077 (GST Exclusive)
Invoice AO1031 $22,176 (GST Exclusive)
Invoice AO1033 $21,562.50 (GST Exclusive)
Invoice AOE328 $67,626.90
Invoice AO1027 refer to note 14
4) The following purchases invoices have not been settled:
Invoice CAN 2218 $14,577.75 (GST Exclusive)
Invoice DDA 26 $19,800 (GST Exclusive)
Invoice US4180 $111,375 (GST Exclusive)
Invoice SSA333 $12,672 (GST Exclusive)
Invoice POT512 $16,632 (GST Exclusive)
Invoice KKL2346 refer to note 13
5) Rent paid $47,817 for the period 1 March 2023 to 29 February 2024
7
8
6) Government wage subsidies amounting to $249,046.88 is not in relation to the Covid19 wage subsidy
7) $128,081.25 of the development grant relates to administration and activities to improve
the company’s business in New Zealand.
8) The company donated $53,623.35 to a hospice so the hospice can fix its leaky roof. The
payment is made with agreement that, if the money is not used to fix the roof, the
company can ask for the $53,623.35 back.
9) The company received $17,305.20 (GST inclusive) for professional services in relation
to starting a business.
10) The company purchased a computer for $45,824.63 to use for business purposes
11) Entertainment expense that were paid during the current taxable period were in relation
to:
Freebies given to customers promoting business
$17,077.50
Meals employees bought while travelling on business
$22,257.68
Snacks and drinks served at business’s trade display
$28,462.50
Overseas entertainment provided to promote the company’s products
$14,231.25
Entertainment at sports and cultural events (including in a corporate box) $14,345.10
Boat hire and providing food and drinks to people on it
$8,538.75
Food and drink provided for social events in an area set aside for senior
employees
$11,385.00
Total
$116,297.78
12) The company purchased a car for $125,235 trade in an existing car for $28,462.50. The
new car will be used in sales promotion of the business. The old car was used for
business purposes.
13) The company exchange its inventory amounting to $49,500 (GST exclusive) for part
settlement of credit purchases Invoice KKL2346 amounting to $116,325 (GST
exclusive). The balance $66,825 of Invoice KKL2346 remains unsettled.
14) The company received taxable supplies amounting to $24,750 (GST exclusive) for part
settlement of its credit sales Invoice AO1027. The balance of the invoice remains
unsettled.
15) The company wrote off a bad debt (Invoice AO788) of $37,798.20 (GST inclusive).
16) The company recovered a debt (Invoice AO822) of $35,691.98 (GST inclusive) which
was written off in a previous GST period..
17) SAFE insurance issued a cheque $11,385.00 to cover equipment damaged in a fire.
18) The legal fees of $18,216 (GST inclusive) was in relation to a court case for defending
the company against a case filed by one of its customers.
8
9
Appendix C continued
19) The company sold its branch operations in Te Awam Muttu and received $122,047.20.
The branch operations obtain its products from the company’s head office operations
and is dependent on these supplies to operate as a going concern. The branch operations
is a going concern at the time of sale, right up to the time of the transfer to the buyer.
20) The company sold its dairy farm to a GST-registered farmer for $5,692,500. The sale
consists of land and buildings but excluding machinery and herd. The company sent an
invoice to the farmer.
21) The company sold land to Sally (not GST registered) for $111,375 (GST exclusive).
Sally intends to use the land to build a house which is to be used as a principal place of
residence for her family.
22) The company sold land in Tokoroa to Elderly Limited (GST registered) and sent an
invoice for $89,100 (GST exclusive). Elderly limited intends to use the land to build
rest homes or hospice for elderly residents in South Waikato.
23) The company also operates a farmstay. The property for the farmstay has been leased
with monthly leased payments of $19,800 (GST exclusive).
24) The dishonored cheque $38,822.85 was in relation to credit sales Invoice 744 issued in
the previous taxable period but the company has now considered it as bad debt.
25) The company purchased from a door-to-door salesperson supplies used in its business
activities. The cancellation period ends 31 March 2023. The company received an
invoice dated 24 March 2023 for $10,246.50
26) The company bought an equipment on hire purchase on 27 March 2023. The cash price
is $27,437.85 which includes GST. The agreement is for 36 monthly payments of
$1,150.88 totalling $41,431.68
27) The company sold goods amounting to $19,923.75 on lay-by. The goods were delivered
in April 2023.
28) The company received rates invoice from Hamilton City Council for $59,771.25 for
one of its business premises. The invoice date was 20 March 2023 and the payment was
made on 15 April 2023.
29) The company purchased vacant land to construct residential properties for sale. The sale
was finalised on 31 March 2023 and the company received an invoice for $118,800
(GST exclusive) due for payment on 10 April 2023.
30) On 15 March 2023, the company purchased an investment residential property for
$1,188,000 which is not new. The payment is due on 15 April 2023
31) The company agrees to acquire land for $2,475,000 plus GST, if any. In a written
statement provided to the vendor, the company indicates that it is registered for GST,
intends to use the land for making taxable supplies and will not use it for other purposes.
9
10
The payment is due on 31 March 2023 but the company made the payment on 2 April
2023.
32) The trade payment of $30,170.25 was received for agreeing to refrain from carrying on
a taxable activity outside New Zealand.
10
11
Question 2 (30 marks)
Munir Limited is a distributor of computer appliances throughout New Zealand and also carries
out a number of other business transactions. Munir Limited also deals in investments and land
transactions. Set out below is a list of balances extracted from the adjusted trail balance of the
company as at financial year end date 31 March 2023:
Accounts with Debit Balances
Net Loss Brought Forward —1 April 2022
Provisional Tax
Tax paid on Overseas Income
Fringe Benefit Tax
Resident Withholding Tax for Dividends received
Accommodation provided to an employee as part of
remuneration package,
Associated Persons’ Remuneration
Use of Money Interest IRD
Salaries and Wages (Net)
PAYE
Kiwi Saver Contributions
ACC Levies
Bonus, gratuity and retiring allowance to employees
Resident Withholding Tax on Contract Income
Contract Expenses
Revaluation Loss Building
Depreciation Building
Depreciation Plant & Equipment
Depreciation Vehicle
Impairment Vehicle
Purchases
Doubtful Debts
Bad Debts
Audit Fees
Donation to religious organisations in New Zealand
Dividends paid (Net)
Interest Expense
Expenditure related to Rental of Office Building
Inventory as at 1 April 2022
Other Expenses
Amount ($)
193,800
204,000
85,000
98,600
17,000
Accounts with Credit Balances
Rental Income of Office Building
Contract Income
Overseas Income
Interest Income (Net)
Gain from Revaluation of Shares Available for sale
Gains from Revaluation of shares Held for trading
Income
Dividend Income (Net)
Amount ($)
408,000
884,000
297,500
30,600
850,000
1,020,000
58,189,300
244,800
11
61,200
532,100
37,400
3,094,000
765,000
180,200
42,500
73,100
25,500
816,000
238,000
102,000
323,000
127,500
8,500
28,940,800
17,000
34,000
68,000
59,500
367,200
255,000
544,000
425,000
1,411,000
12
Additional Notes:
•
An examination of the ledger account, shows that other expenses comprise of the
following:
$
Professional and consulting fees
68,000
Bank service charges
17,000
Fines and penalties
18,700
Entertainment expenses
42,500
Repairs and Maintenance
408,000
Loss caused by misappropriation by employees
8,500
Expenses in relation to s CW1 Income Tax Act 2007
255,000
Expenses in relation to s CX42 Income Tax Act 2007
425,000
Insurance
68,000
Rates
100,300
1,411,000
•
The cost of inventory as at 31 March 2023 is $382,500 and the net realisable value
of the inventory is $340,000.
•
In accordance with the Income Tax Act 2007, Munir Limited has satisfied the
continuity of shareholder test and therefore the company is allowed to carry forward
the previous years’ loss. The net tax loss brought forward from previous years is
$193,800.
•
The tax depreciation for the year ended 31 March 2023 are as follows:
➢ The annual tax depreciation rate for buildings is 0%
➢ The total tax depreciation for Plant and Equipment is $204,000
➢ The total tax depreciation for Vehicles is $136,000
•
The provisional tax account for year ended 31 March 2023 is as follows:
Provisional Tax A/C
Date
Accounts
Amount
Date
Account
Amount
1/4/2022
Balance b/d
255,000 31/3/2023 Tax Payable
255,000
9/5/2022
Bank
68,000 31/3/2023 Balance c/d
204,000
28/8/2022
Bank
68,000
15/1/2023
Bank
68,000
______
459,000
459,000
•
Details of expenditure related to rental of office building is provided below:
$
Rental Agency Commission
42,500
Apportionment of Repairs and Maintenance
294,100
Apportionment of Insurance
8,500
Apportionment of rates
15,300
Apportionment of Building Depreciation
39,100
Apportionment of interest expense
85,000
Administration
59,500
544,000
12
13
•
Entertainment expenses
Entertainment that promotes business where the public has the same access as
the employees, business contacts and people associated with the business
$1,368.50
Freebies given to customers promoting business
$2,533.00
Meals employees bought while travelling on business
$3,362.60
Snacks and drinks served at business’s trade display
$2,033.20
Overseas entertainment provided to promote the company’s products
$20,768.90
Entertainment at sports and cultural events (including in a corporate box)
$2,895.10
Bottles of wine provided to each customer who buys a company’s product
amounting to more than $1,000
$782.00
Boat hire and providing food and drinks to people on it
$6,801.70
Food and drink provided for social events in an area set aside for senior
employees
$1,955.00
Total
$42,500.00
•
Income for the year ended 31 March 2023 consists of the following:
Sales
Income from trade tie arrangement Note 1
Gains from sale of shares Note 2
Licensing agreements receipts Note 3
Land Transactions Note 4
Income in relation to s CW1 Income Tax Act 2007
Income in relation to s CX42 Income Tax Act 2007
Total
39,999,300
1,700,000
5,100,000
850,000
9,350,000
510,000
680,000
58,189,300
Note 1: Munir Limited entered into an exclusive arrangement with Caltex Limited to
only sell its brand of petrol for a period of 10 years. Munir Limited also undertook that
it would not establish a new service station business within five miles of its existing
business for a period of five years without also agreeing to sell the products of Caltex
Limited.
Note 2: Munir Limited systematically bought and sold shares. There was substantial
repetition and turnover in buying and selling the shares
Note 3: Munir Limited entered into a series of “licence agreements” with various
companies to supply information and manufacturing data to the companies and agreed
to teach their technicians how to grow a new type of KIWI fruit.
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Note 4: The following land transactions were undertaken by Munir Limited:
Purchased a 50 hectare farm in 1 July 2014 for $3.4
million and sold the land to a developer on 30 June 2022
for $6.8 million. The local council rezoned the land from
farming to residential in December 2016. About 22% of
the profit on sale resulted from the zoning change.
Purchased 10 acres, containing a house, garage, and
barn for $2,074,000. The land value portion was
$1,020,000. Council approval was obtained for a
subdivision of seven acres (original land value
$714,000), which was carried out, and the land
subsequently sold for $1,530,000. Costs involved in the
subdivision amounted to $93,500 including professional
services of surveyor, solicitor and valuer; fencing, felling
and planting work, and the excavation of a driveway;
removal of pine trees, a bush regeneration programme,
stock-proof fencing, a site survey, the excavation of a
driveway, and the planting of trees. The buildings and
one acre of the remaining three acres are used for the
Munir Limited’s restoration business.
Improvements costing $102,000 were made to a piece of
land that was purchased in 2000 for $680,000. The
improvements (not minor) were made on August 2008
and the land was disposed for $1,020,000 in April 2022
TOTAL
$6,800,000
$1,530,000
$1,020,000
$9,350,000
Required:
Prepare the following for Munir Limited:
a) Financial Statements Summary (Extract of IR10: all boxes from Box 1 to Box 29) for
year ended 31 March 2023. You are required to prepare details working for each of the
boxes 1 – 29 in IR10. Use the form provided in the link below:
https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir1–ir99/ir10/ir10-2016onwards.pdf?modified=20230808040834&modified=20230808040834
b) Prepare the Income Tax Return Companies (IR 4: Boxes in Sections 12-32L) for the
period 1 April 2021 to 31 March 2023. You are required to prepare details working for
each of the sections 12 – 32L in IR4. Use the form provided in the link below:
https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir1–ir99/ir4/ir4-2023.pdf?modified=20230330222413&modified=20230330222413)
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