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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Your client is Shannon Johnstone. After two years of testing the heating and cooling mats he developed for dogs, Shannon registered the business name ‘Warm or Frosty Pet Mats’ on 1 July 2020. Shannon projects his sales for the year ended 30 June 2021, excluding GST, to be the following:

  • Sales to pet stores and vet clinics in Australia, $70,000;
  • Export sales to pet stores and vet clinics in New Zealand, $12,000.

 

REQUIRED:

  1. Based on the projected sales, advise Shannon Johnstone whether he was required to register for GST on 1 July 2020.
  2. Explain why a business would voluntarily elect to register for GST where the projected turnover is less than the registration threshold.
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