As per the above calculations that had been done, it can be seen that the resident company which had been owned by two individuals has an opening balance of $7,000 in its franking account for the current income year. On 18 July, the company paid an instalment of $30,000 to the investors which had been calculated as a credit in the company’s account, in this way the current balance of the company rises up to $37,000. On 29th August, the company paid cash dividend of $35,000 on which the amount was franked to 80%. Therefore, in this case, the company would need to calculate the amount with 20% of the cash left or the amount not paid as dividend. The balance amount after multiplying 28,000 with 20% of the cash left it may be taken as $7,000, whose total calculated amount would be $44,000, which had been derived after adding $37,000 PAYG instalment with $7,000 balance. In 3rd September, the company received a total amount of $ 28,000 under which the cash that had been franked to 90%. The cash that had been left would need to be credited to the account of the company through which the outcome of the calculations would be subtracting $44,000 by $2,800 resulting in an outcome of $41,200. For a small company, the rate of Franking credit would be 27.5%. This would need to be notified to the shareholders of the correct dividend and franking credit amount according to the Tax Rates Act 1986. In this way, it may be good for the company to calculate the amount in an effective way and make the calculations according to the tax Assessment Act of 1997. On 21st September, the company paid cash dividend with franking credit of $1,800 which had been attached with the dividend amount and the cash that would need to be paid was $7,000. Thence, after calculating the works, the outcome of the calculations was $46,400 which had been earned after subtracting $7,000 with $1,800. As on 5th October, salaries had been paid to the shareholders who were to receive the dividends under the Div 7A of ITAA36. The amount that would need to be deemed was $21,000. On 2nd February, the company received a income tax of $18,000 which it can be calculated under the Assessment Act of 1997, the outcome after subtracting $18,000 from $67,400 had resulted $49,400. Lastly, on 10th March, the company paid a dividend of $1,000 which would need to be added by $49,400 and the outcome would be 50,400. On 21st April, PAYG instalment was due which amounted to $90,000, but was due till 3rd July and this would not been paid till next year and would not be recorded in the current year. In this way, the calculations had been done in an effective way and Franking credit had been calculated in an effective way through which it had become easy for the company to work effectively.