Hi There,
I am thinking to have an online business (pty Ltd) and I need some advice and help from following scenarios (example only) based on Australian Small Business tax.
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I purchased some products from overseas. Please kindly see following
These product are for selling purpose and this is the cost from supplier:
100 x Pens = $100, mean $1 each Pen50 x NotesPads = $150, mean $3 each NotesPad50 x Mouse = $500, mean $10 each mouse20 x Keyboards = $400, mean $20 each keyboardsTOTAL OF 220 items and $1150
Following are for daily or business use1 x Printer = $10010 x Printer Labels = $100TOTAL OF $200
Item has been shipped from oversea to Australia and the freight shipment is $500
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In this financial Year, we sold
50 x Pens = $150, mean $3 each30 x NotesPads = $150, mean $5 each30 x Mouse = $600, mean $20 each20 x Keyboards = $1000, mean $50 each
TOTAL OF SALE is $1900
We paid shipping costs $200 to courier to ship the item to customers.
2 Mouse and 1 Keyboard has been damaged during the operating, not able to sell
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Question 1:a) What should I categorize the shipment cost $500 from overseas? Is this the expense or cost of goods sold?
b) If it is cost of goods sold, does this mean $500 needed to divide by 220 items in this shipment and add $2.20 to each quantity? For example, the cost of a pen was $1 and now it's $3.20?Or I can just put $500 as the cost of goods sold for that financial year.
Question 2:a) In regards to the shipping cost we pay to ship the items to Customers, Is this Expenses or Cost of Goods Sold?b) What should I categorize the 2 Mouse and 1 Keyboard which are damaged? What type of documents should I keep to prove to the tax office in case they ask.
Question 3:a) What’s the Gross Profit and Net Profit based on my scenario?
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I hope that someone can help me out as I am new to business
Thanks again for your help and advice.
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