Case: J Rowe & Son Pty Ltd v FC of T 71 ATC 4157; (1971) 142 CLR 421
Your analysis of the case should include discussion of the following points:
• Summarise the key facts of the case
• The arguments put forward by each party
• The issues that had to be decided by the Court
• Summarise the main reasons for the Court’s decision
• Relevant principles learned
In writing your discussion of the principles established by the court in arriving at the decision, consider the impact on the following scenario:
Sole Trader Pty Ltd sold a refrigerator to a retail customer on 15 January 2014. The floor price was $1000. However, the sale was made on the following deferred terms:
No initial payment. Price is to be paid in 12 equal instalments of $100, payable at the end of each calendar month.
1. How much income has been derived from the sale of refrigerator for the year ending 30 June 2014 ?
2. How much interest income has been derived from the provision of credit for the year ending 30 June 2014 if all payments are made on time?
3. How much interest income has been derived from the provision of credit for the year ending 30 June 2014 if the customer actually pays the June instalment two days later on 2 July ?
(Assume a simple principal and interest loan repayment)
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