Task C6.1 Preparation of a business activity statement

Step 1 of 1

Businesses use a business activity statement to report and meet their tax obligations with the Australian Taxation Office (ATO). The frequency of lodgment can vary according to the size of the business.

 

Case study

ACME Novelties sells party supplies and fun gifts from a shop and over the internet. Higher shipping costs mean all sales are in Australia, with no overseas customers. The business has an ABN and is registered for GST.

The owner, Will Simons, wants to complete his activity statement to find out whether he must pay the ATO this quarter or whether he is entitled to a refund.

He gives you the following financial information about the business to help fill in the form.

Information Fill in at Amount
Total sales including GST G1 $220,000 (sales $200,000 + GST $20,000)
Non-capital purchases* G11 $66,000 (purchases $60,000 + GST $6,000)
Wages paid to employees W1 $42,800
Tax withheld W2 $7,488

* This is the cost of stock and other normal operating expenses.

Will is going to use Option 1: Calculate GST and report quarterly when he fills in the activity statement.

 

Your task

  1. Download a sample business activity statement. Fill in the form and calculate whether ACME Novelties has to make a payment to the ATO or if it is entitled to a refund.
  2. Go to business activity statements on the ATO website and find out alternative ways that ACME Novelties could lodge their activity statement. List two advantages and disadvantages of the alternative methods.

 

Extension activity

Survey some small business people in your local area and ask them about the following issues/topics:

  • Do they experience any problems in preparing their business activity statement?
  • Who normally prepares the business activity statement for their business?
  • What records or information do they need to prepare their business activity statement?

Report the results of the survey to the class.

Well done!

  • Fact 9

    The Australian Taxation Office started as the Commissioner of Land Tax in 1910 with a dozen employees. It was based in the Department of Treasury, situated in Melbourne, which was the seat of the Commonwealth Parliament until 1927.

Instalment activity statement (IAS)

A form similar to the BAS (but without GST and some other taxes) used by businesses not registered for GST, and by individuals who are required to pay PAYG instalments or PAYG withholding, such as self-funded retirees.

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