Nick invests in several companies and received the following dividends during the current year:Dividend excluding franking credits ($) Franking Credit ($)CompanyShelly Petroleum Ltd10,4005,200Great Lobster Balls Of Fire Ltd 25,200Based on the above facts and relevant tax laws, how should Nick treat the amounts received from these investments?(select the best answer)ABCOnly dividends totalling $15,600 should be recognised as statutory income and only franking credits totalling$5,200 should be recognised as a refundable tax credit.Dividends totalling $40,800 should be recognised as statutory income and franking credits totalling $5,200should be recognised as a refundable tax credit.Dividends totalling $35,600 should be recognised as statutory income and franking credits totalling $5,200should be recognised as a refundable tax credit.DDividends totalling $10,400 should be recognised as ordinary income and franking credits totalling $5,200 shouldbe recognised as a refundable tax credit.TrueFalseWhen returning from his lobster catching trip, Nick was fined $6,000 by Fisheries officers who inspected his catch andfound 2 undersized lobsters in his possession.Based on the above facts and relevant tax laws, Nick can claim this amount as a deduction because it relates to hisbusiness activities.

Franking credits are a type of tax credit that Australian companies can pass on to their…

Answered: Based on the above facts and relevant…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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