Charles Whyte commenced business on May 1 2019, making up his accounts to September 30 annually....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Charles Whyte commenced business on May 1 2019, making up his accounts to September 30 annually. The statement of the Profit or Loss Account for the first 17 months ended September 30,2020 is as follows: Gross Profit Less: Repairs and maintenance Local transport and travelling Salaries and wages Provision for bad debts Preliminary expenses Depreciation Bank interest and charges Legal and professional charges General expenses (Allowable) Clearing expense on motor vehicle Bad debt £'000 1,500 2,450 6,500 1,350 960 1,630 1,520 1,380 1,870 685 2,800 £'000 19,300 22,645 (3,345) (0) Bad debt Amounts written off Loan to absconded employee (ii) (iii) (iv) You are also given the following additional information. £ (v) The following qualifying capital expenditures were acquired on: 30/10/2018 1/1/2019 1/5/2019 Building Motor Vehicle Furniture and fittings Legal and professional charges were: Fines for contravention of the law Legal expenses for tax appeal Audit and accountancy charges Salaries and wages: 1,850.000 950.000 Senior staff Junior staff 3 Charles Whyte's Children in higher institution £ 5,500,000 3,800,000 1,900,000 Provision for bad debts was calculated as 5% of balance of trade debtors as at September 30, 2020. £ 350,000 185,000 845,000 1,380,000 £ 3,500,000 2,400,000 600,000 6,500,000 a. Identify FIVE deduction not allowable for the purpose of ascertaining the income of an individual for tax purposes. (5 Marks) b. Compute the Adjusted Profit of Charles Whyte for the period ended. September 30,2020 (10Marks) Charles Whyte commenced business on May 1 2019, making up his accounts to September 30 annually. The statement of the Profit or Loss Account for the first 17 months ended September 30,2020 is as follows: Gross Profit Less: Repairs and maintenance Local transport and travelling Salaries and wages Provision for bad debts Preliminary expenses Depreciation Bank interest and charges Legal and professional charges General expenses (Allowable) Clearing expense on motor vehicle Bad debt £'000 1,500 2,450 6,500 1,350 960 1,630 1,520 1,380 1,870 685 2,800 £'000 19,300 22,645 (3,345) (0) Bad debt Amounts written off Loan to absconded employee (ii) (iii) (iv) You are also given the following additional information. £ (v) The following qualifying capital expenditures were acquired on: 30/10/2018 1/1/2019 1/5/2019 Building Motor Vehicle Furniture and fittings Legal and professional charges were: Fines for contravention of the law Legal expenses for tax appeal Audit and accountancy charges Salaries and wages: 1,850.000 950.000 Senior staff Junior staff 3 Charles Whyte's Children in higher institution £ 5,500,000 3,800,000 1,900,000 Provision for bad debts was calculated as 5% of balance of trade debtors as at September 30, 2020. £ 350,000 185,000 845,000 1,380,000 £ 3,500,000 2,400,000 600,000 6,500,000 a. Identify FIVE deduction not allowable for the purpose of ascertaining the income of an individual for tax purposes. (5 Marks) b. Compute the Adjusted Profit of Charles Whyte for the period ended. September 30,2020 (10Marks)
Expert Answer:
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these accounting questions
-
Ralph, aged 36, and Danielle, aged 33 are married for many years. The couple are jointly assessed for income tax purposes and have provided you with the following information: Ralph Ralph has been...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1 and 2. On September 1, Irene opened a retail store that specializes in sports car...
-
Jen and Berry's sells ice-creams from its factory-shop in Petone. There is a managing director (Maynard Dibble), a marketing manager (Mary Salman) and a production manager (Peter Pritchard). Maynard...
-
. The following is given: EBIT = $50 000, Q=60 000, P =$6, V = $4. a) If sales should increase by 10%, by what percent would EBIT increase? b) If sales should increase by 10%, for what interest...
-
For each of the 32 National Football League teams, the numbers of points scored and allowed during the 2012 season are shown below. Assuming these are sample data, answer the following questions. You...
-
Read each of the following question and circle the answer that best describes you. Think about how you typically act in a work or school situation and mark the answer that first comes to mind. There...
-
Consider the three-component system consisting of acetaldehyde (1), hydrogen (2), and ethanol (3). The binary diffusivity values at \(548 \mathrm{~K}\) and \(101.3 \mathrm{kPa}\) are given in Example...
-
The Center for Information Technology at State University has outgrown its office in Bates (B) Hall and is moving to Allen (A) Hall, which has more space. The move will take place during the 3-week...
-
A mass oscillating up and down on the bottom of a spring (assuming perfect elasticity and no friction or air resistance) can be modeled as harmonic motion. If the weight is displaced a maximum of 6...
-
Contrast the Islamic family with the socialist-law family.
-
4. Summarized financial position of a business on 30.11.2022 is as follows: Assets = Liabilities + Owners' Equity Cash + Accounts Receivable + Supplies + $1.720 $3.240 Land $24,100 = Accounts Payable...
-
If the price of fish increases, then there is a change in: a. the supply of fish b. the quantity supplied of fish c. the amount of fish sold d. cannot tell from the information given
-
In Problems 33-38, graph each function and then classify as a linear, quadratic, exponential, logarithmic, or probability function. \(f(x)=2 x^{2}\)
-
The state and output equations of a system are The systems is (a) Neither state controllable nor output controllable (b) State controllable but not output controllable (c) Output controllable but not...
-
List the items (e.g., check numbers, transaction dates, and individual amounts) and totals of each category of fraud.
-
Review the deposits. a. How often and when were the deposits made? b. Is anything missing from the deposits? c. How do deposits relate to the bank reconciliation?
-
Receiving and shipping functions begin and end when carriers cross the property line. Problems occur in planning receiving and shipping facilities if carriers that interface with receiving and...
-
In a nonmagnetic medium, E = 50 cos (10 9 t 8x) a y + 40 sin (10 9 t 8x) a z V/m find the dielectric constant r and the corresponding H.
-
Ken paid the following amounts for interest during 2012: Qualified interest on home mortgage...........................................$4,700 Auto loan...
-
Jenny earns $34,500 in 2012. Calculate the FICA tax that must be paid by: Jenny: ..............................Soc,Sec. ..................$______________...
-
Kathy Kennedy (age 44) is a single taxpayer and she lives at 212 North Pine Way, Payson, AZ 85541. Her Social Security number is 467-98-9784. Kathy's earnings and income tax withholding as the...
-
What effect does having public health insurance have on the number of doctor visits a person has during a year? Using 1988 data,rwm88_small, from Germany we will explore this question. The data file...
-
Specify a variance function and use it to test for heteroskedasticity with (a) a Breusch-Pagan test and (b) a White test.
-
How much of an incumbency advantage do winners in U.S. House elections enjoy? This is the topic of a paper by David S. Lee (2008) "Randomized experiments from nonrandom selection in U.S. House...
Study smarter with the SolutionInn App