Course Code -HI6028 Taxation Theory Practice, and Law

Taxation Theory, Practice, and Law

One feature of a good tax system is ‘neutrality’. Critically discuss this feature.

A good tax system must be just and unbiased, it should be neutral and it is a good feature that an effective tax system must-have. Neutrality means that the tax system must be neutral regardless of different influences while conducting taxation operations.  The tax system must be equal to all the taxpayers and should not be biased towards some taxpayers hence having a neutral stance within the taxation process of the country It is important to understand that this is an important feature that every tax system must have to effectively inherit an efficient tax system which is viable and transparent (Murphy, 2019).

Briefly explain the different functions of taxation.

There are 5 main functions of taxation and they are as follows;

  1. Allocation is a major function conducted by the taxation system to effectively allocate financial funds from the wealthy to the deprived community.
  2. Regulatory function is also a major function of the taxation system in which the taxation system has a primary aim of regulating fiscal activities in the region.
  3. Stimulating fiscal operations and policies is another function of the taxation system.
  4. Dissimulating is function conduct through taxation operation to manage the socio-economic progress in the region
  5. Controlling the financial resources the revenue and expense of the economy is a major function performed by taxation operations.

Estimated expenses by a function that the Government proposed to spend the collected tax revenue on

Now there are several different functions on which the regulatory body spend through the taxable gained and they are as follows;

  1. The taxation revenue is expended for public welfare activities such as for cleaning and hygiene purposes and maintenance of road conditions.
  2. The revenue is also spent on the welfare of the deprived community in the country by creation of fiscal support policies
  3. Taxation is also expensed on education and infrastructural development of the country which will support the education and business sector of the nation.

Managerial Accounting

List and briefly describe 5 examples of how management accounting information could

assist in managing resources at a Banking corporation.

Management accounting information is used extensively within a banking organization to conduct various operations and for making business decisions.  The 5 examples of using management accounting information within the operational activities of the banking corporation are as follows;

  1. Usage of management accounting information is used with banks for making financial investments this is because through management accounting information the risks and cost of investment are analyzed and the ability of investment options is also analyzed, helping the institution in effectively investing in different options.
  2. Setting up banking and policies is also done through the usage of management accounting information through this the management can create new policies for its customers to attract more customers for financial investment within the company.
  3. Analysis of business performance within banking institutions is also done through the use of management accounting information that is derived from budgets that have been created.
  4. Management of financial resources within the firm is also done using management accounting information such as risks and inflations rates.
  5. Managing the capital structure of the institution is also done through the help of management accounting information that is used to analyze the leverage associated with firms' capital formation (Woellner et al. 2016).

Calculation

a) Prepare the schedule of cost of goods manufactured for Nani’s fashion.

 

Particulars

Amount

Amount

Direct material used

 

 

Beginning Raw material Inventory

 $            20,000.00

 

Add the cost of raw material purchased

 $            90,000.00

 

Total Raw material available

 $ 1,10,000.00

 

Less Ending raw material inventory

 $            12,500.00

 

Total Raw material used

 

 $            97,500.00

Direct Labor

 

 $ 1,00,000.00

Manufacturing overhead

 

 

Indirect Materials

 $              5,000.00

 

Indirect Labour

 $              7,500.00

 

Depreciation on plant and equipment

 $            30,000.00

 

Electricity Plant

 $            20,000.00

 

Other manufacturing overhead

 $            40,000.00

 

Total manufacturing overhead

 

 $ 1,02,500.00

Total manufacturing cost

 

 $ 3,00,000.00

Add beginning work in process inventory

 

 $            20,000.00

Less Ending work in process inventory

 

 $            15,000.00

Cost of goods manufactured

 

 $ 3,05,000.00

 

b) Prepare the schedule of cost of goods sold for Nani’s Fashions and explain the information provided by the schedule of cost of goods sold.

 

 

Particulars

Amount

Amount

Direct material used

 

 

Beginning Raw material Inventory

 $            20,000.00

 

Add the cost of raw material purchased

 $            90,000.00

 

Total Raw material available

 $ 1,10,000.00

 

Less Ending raw material inventory

 $            12,500.00

 

Total Raw material used

 

 $            97,500.00

Direct Labor

 

 $ 1,00,000.00

Manufacturing overhead

 

 

Indirect Materials

 $              5,000.00

 

Indirect Labour

 $              7,500.00

 

Depreciation on plant and equipment

 $            30,000.00

 

Electricity Plant

 $            20,000.00

 

Other manufacturing overhead

 $            40,000.00

 

Total manufacturing overhead

 

 $ 1,02,500.00

Total manufacturing cost

 

 $ 3,00,000.00

Add beginning work in process inventory

 

 $            20,000.00

Less Ending work in process inventory

 

 $            15,000.00

Cost of goods manufactured

 

 $ 3,05,000.00

Selling and administrative expenses

 

 $            75,000.00

Add Beginning Finished Good inventory

 

 $            10,000.00

Less Ending Finished Goods inventory

 

 $            25,000.00

Cost of good sold

 

 $ 3,65,000.00

 

The calculation above shows the total cost of goods sold that have been incurred by the company in conducting the sale of the product. Now this const includes the total material costs, manufacturing overall and to overall product sales and administrative cost that has been incurred currently by the firm in their operational activities. The total cost of goods sold that the company has incurred is $ 365,000.

c) Prepare an income statement for the current year.

 

Particulars

Amount

Amount

Sales

 

 $ 4,75,000.00

Direct material used

 

 

Beginning Raw material Inventory

 $            20,000.00

 

Add the cost of raw material purchased

 $            90,000.00

 

Total Raw material available

 $ 1,10,000.00

 

Less Ending raw material inventory

 $            12,500.00

 

Total Raw material used

 

 $            97,500.00

Direct Labor

 

 $ 1,00,000.00

Manufacturing overhead

 

 

Indirect Materials

 $              5,000.00

 

Indirect Labour

 $              7,500.00

 

Depreciation on plant and equipment

 $            30,000.00

 

Electricity Plant

 $            20,000.00

 

Other manufacturing overhead

 $            40,000.00

 

Total manufacturing overhead

 

 $ 1,02,500.00

Total manufacturing cost

 

 $ 3,00,000.00

Add beginning work in process inventory

 

 $            20,000.00

Less Ending work in process inventory

 

 $            15,000.00

Cost of goods manufactured

 

 $ 3,05,000.00

Selling and administrative expenses

 

 $            75,000.00

Add Beginning Finished Good inventory

 

 $            10,000.00

Less Ending Finished Goods inventory

 

 $            25,000.00

Cost of good sold

 

 $ 3,65,000.00

Tax expenses

 

 $            45,000.00

Profit

 

 $            65,000.00

 

List 5 types of management accounting information that might assist K-mart management to make business decisions

The five-time of the management accounting information that might assist K-mart management to make business decisions are as follows;

  1. Budgetary information will help the firm in managing the budget for the firm future operations
  2. Information related to the financial viability of information generated through management accounting can help the firm in analyzing the profitability in different investment operations.
  3. Information from Cash flow analysis will help the firm in know the cash flow of the business
  4. Information of financial leverage metric will help the firm in analyzing its financial leverage
  5. Product costing and valuation information will help the firm in making decisions related to the pricing of its products and services (Kaplan and Atkinson, 2015).

Through the usage of all this information, the firm will be able to effectively make decisions in regards to the company's future financial operations.

 

References

Kaplan, R.S. and Atkinson, A.A., 2015. Advanced management accounting. PHI Learning.

Murphy, K., 2019. Procedural justice and the Australian Taxation Office: A study of scheme investors. Centre for Tax System Integrity (CTSI), Research School of Social Sciences, The Australian National University.

Otley, D., 2016. The contingency theory of management accounting and control: 1980–2014. Management accounting research, 31, pp.45-62.

Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation Law 2016. OUP Catalogue.

 

No Need To Pay Extra
  • Turnitin Report

    $10.00
  • Proofreading and Editing

    $9.00
    Per Page
  • Consultation with Expert

    $35.00
    Per Hour
  • Live Session 1-on-1

    $40.00
    Per 30 min.
  • Quality Check

    $25.00
  • Total

    Free

New Special Offer

Get 25% Off

review

Call Back