Mr. Ole Mboga is married to Pesa Mboga. Ole Mboga is a registered engineer and he...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Mr. Ole Mboga is married to Pesa Mboga. Ole Mboga is a registered engineer and he is the proprietor of Leta Engineering Services a firm of consulting engineers. He is nevertheless fully occupied as an employee of Zeta Construction Limited. His company is therefore managed by his wife who draws Sh.50,000 per month as salary. PAYE of Sh.20,000 per month is deducted and remitted to the Commissioner. Zeta Construction Ltd. provided the following emoluments to Mr. Ole Mboga for the year ended 31 December 2020: 1. Salary of Sh.150,000 per month (PAYE deducted and paid to the Commissioner Sh.62,000 per month). 2. Housing - Free housing is provided, with water and electricity. He pays a nominal sh.10,000 per month. Water consumed was for Sh.4,800 and electricity consumed was for Sh. 18,000 during the year. 3. 1,000 ordinary shares for past years of service. Last valuation of shares was at sh.50 cach. The issued share capital is now 25,000 shares. The company paid a dividend of Sh. 10 per share on 31 December 2020. 4. Company car of 2000 ce. 5. Leave pay equal to one month's salary. Life insurance premium per cach housechold member of Sh.10,000 per annum. This covers himself, wife and son. 6. 7. Pension at 10% per month. He contributes 5% towards the same scheme. The scheme is registered. Leta Engineering Services made an assessed loss of Sh.400,000 for the year of income 2020. Mr. Ole Mboga owns property which he bought many years ago. Rent income account for the year 2020 is as follows: Sh. Sh. 300,000 Gross rent Less: Loan repayment Interest on loan Fencing Caretaker wages Insurance, rent and rates Replaced broken doors Loss to be carried forward 150,000 125,000 30,000 55,000 25,000 85,000 470.000 170,000 Required: Taxable income of Mr. Ole Mboga for the year of income 2020. Tax payable by Mr. Ole Mboga for the year of income 2020. (12 marks) (a) (b) ( 5 marks) Mr. Ole Mboga is being invited by Tana Ranching Company Limited to be their manager and reside at the farm. What will be the tax implications of this? Explain but do not compute if he takes up the offer and every thing remains unchanged other than the residence. (c) ( 3 marks) (Total: 20 marks) Question Two Maina, Njoka and Otieno are in partnership sharing profits and losses in the ratio of 3:1:1 respectively. For the year ended 31 December 2020, they presented the following trading and profit and loss account. Sh. Sh. 13,000,000 Sales Cost of sales: Opening stock Purchases Closing stock Gross profit Other operating income 2,200,000 4,000,000 ENO 000 5400.000 7,600,000 400.000 8,000,00 Еxpenses Salaries and wages 2,500,000 Rent Advertisement 40,000 120,000 Transport Depreciation Interest on partners' capitals Commissions paid to partners Printing and stationery Repairs and maintenance Postage and telephone Legal fees 60,000 75,000 450,000 90,000 144,000 380,000 17,000 23,000 110,000 4.000 Insurance Gifts Net profit (4.013.000) 3.987.000 Additional information: 1. Opening stock and closing stock have each been understated by 10ns 2 Other operating income includes Sh. 50,000 related to gain on sale of furniture. 3. Salaries and wages include salaries to Maina, Njoka and Otieno of Sh. 300,000, Sh. 250,000 and Sh. 50,000 respectively for the year ended 31 December 2020. 4. Transport costs include Sh. 18,000 paid to Otieno on account of a private trip. 5. Interest on partners' capitals and commissions paid to partners are to be apportioned equally to the partners. 6. The gifts were given to the staff of the firm during the end of year party. 7. Capital allowances due to the firm for the year ended 31 December 2020 were agreed at Sh. 120,000. Required: The partnership's adjusted profit (or loss) for tax purposes for the year ended 31 December 2020. Distribution of the tasxable profit (or loss) between the partners as at 31 December 2020, (1) Mr. Ole Mboga is married to Pesa Mboga. Ole Mboga is a registered engineer and he is the proprietor of Leta Engineering Services a firm of consulting engineers. He is nevertheless fully occupied as an employee of Zeta Construction Limited. His company is therefore managed by his wife who draws Sh.50,000 per month as salary. PAYE of Sh.20,000 per month is deducted and remitted to the Commissioner. Zeta Construction Ltd. provided the following emoluments to Mr. Ole Mboga for the year ended 31 December 2020: 1. Salary of Sh.150,000 per month (PAYE deducted and paid to the Commissioner Sh.62,000 per month). 2. Housing - Free housing is provided, with water and electricity. He pays a nominal sh.10,000 per month. Water consumed was for Sh.4,800 and electricity consumed was for Sh. 18,000 during the year. 3. 1,000 ordinary shares for past years of service. Last valuation of shares was at sh.50 cach. The issued share capital is now 25,000 shares. The company paid a dividend of Sh. 10 per share on 31 December 2020. 4. Company car of 2000 ce. 5. Leave pay equal to one month's salary. Life insurance premium per cach housechold member of Sh.10,000 per annum. This covers himself, wife and son. 6. 7. Pension at 10% per month. He contributes 5% towards the same scheme. The scheme is registered. Leta Engineering Services made an assessed loss of Sh.400,000 for the year of income 2020. Mr. Ole Mboga owns property which he bought many years ago. Rent income account for the year 2020 is as follows: Sh. Sh. 300,000 Gross rent Less: Loan repayment Interest on loan Fencing Caretaker wages Insurance, rent and rates Replaced broken doors Loss to be carried forward 150,000 125,000 30,000 55,000 25,000 85,000 470.000 170,000 Required: Taxable income of Mr. Ole Mboga for the year of income 2020. Tax payable by Mr. Ole Mboga for the year of income 2020. (12 marks) (a) (b) ( 5 marks) Mr. Ole Mboga is being invited by Tana Ranching Company Limited to be their manager and reside at the farm. What will be the tax implications of this? Explain but do not compute if he takes up the offer and every thing remains unchanged other than the residence. (c) ( 3 marks) (Total: 20 marks) Question Two Maina, Njoka and Otieno are in partnership sharing profits and losses in the ratio of 3:1:1 respectively. For the year ended 31 December 2020, they presented the following trading and profit and loss account. Sh. Sh. 13,000,000 Sales Cost of sales: Opening stock Purchases Closing stock Gross profit Other operating income 2,200,000 4,000,000 ENO 000 5400.000 7,600,000 400.000 8,000,00 Еxpenses Salaries and wages 2,500,000 Rent Advertisement 40,000 120,000 Transport Depreciation Interest on partners' capitals Commissions paid to partners Printing and stationery Repairs and maintenance Postage and telephone Legal fees 60,000 75,000 450,000 90,000 144,000 380,000 17,000 23,000 110,000 4.000 Insurance Gifts Net profit (4.013.000) 3.987.000 Additional information: 1. Opening stock and closing stock have each been understated by 10ns 2 Other operating income includes Sh. 50,000 related to gain on sale of furniture. 3. Salaries and wages include salaries to Maina, Njoka and Otieno of Sh. 300,000, Sh. 250,000 and Sh. 50,000 respectively for the year ended 31 December 2020. 4. Transport costs include Sh. 18,000 paid to Otieno on account of a private trip. 5. Interest on partners' capitals and commissions paid to partners are to be apportioned equally to the partners. 6. The gifts were given to the staff of the firm during the end of year party. 7. Capital allowances due to the firm for the year ended 31 December 2020 were agreed at Sh. 120,000. Required: The partnership's adjusted profit (or loss) for tax purposes for the year ended 31 December 2020. Distribution of the tasxable profit (or loss) between the partners as at 31 December 2020, (1)
Expert Answer:
Answer rating: 100% (QA)
a taxable income for 2015 2260080 b tax payable 198811 c house benefit is the 10 of ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
2. The accounting profit before tax for the year ended 31 December 2020 for Marmadey Sdn Bhd amounted to RM37,000. The draft statement of financial position at 31 December 2020 contained the...
-
The income statements for the year ended 31 December 2020 and the statements of financial position as at 31 December 2020 for Garden Plc, Leaf Ltd and Flower Ltd are given as follows: Statements of...
-
The summarized statements for the year ended 31 December 2007 for Mat, Rug and P entities are as follows: Statements of comprehensive income for the year ended 31 December 2007 The following...
-
Consider the plane stress inhomogeneous case with only variation in elastic modulus given by E = E(y) = 1/ (Ay + B). Further assume that the Airy function depends only on y, = (y). Show that...
-
Spend some time driving in Detroit, Michiganthe Motor Cityand youre sure to see bumper stickers with messages like Buy American or Out of a job yet? Keep buying foreign! or Hungry? Eat your foreign...
-
How many slits per centimeter does a grating have if the third order occurs at a 15.0 angle for 620-nm light?
-
What usually happens to the total biomass in an ecosystem during succession? Does the number of species present in an ecosystem usually change as succession continues?
-
Hahn Textiles has a tax loss carry forward of $800,000. Two firms are interested in acquiring Hahn for the tax loss advantage. Reilly Investment Group has expected earnings before taxes of $200,000...
-
The bookstore at Syracuse University uses scientific methodology to cut costs and provide "great service" to the students. The store manager, Mrs. Alexis Cash-Lovver, has compiled the following data...
-
Two blocks, of masses M = 2.0 kg and 2M, are connected to a spring of spring constant k = 200 N/m that has one end fixed, as shown in Figure. The horizontal surface and the pulley are frictionless,...
-
A car with mass of 1000 kg without passengers has a seating capacity of 4 passengers each having a maximum mass of 100 kg. The wheel base is 2.2 m and the center of gravity of loaded car is 1.2 m...
-
Consider a situation in which the government is considering whether to provide universal healthcare coverage, which would mean that workers would no longer need to keep their current job to maintain...
-
A B C D E F G H I J 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 A) On June 1, the 4-month interest rates in Switzerland and the United States were, respectively, 2% and 5% per annum with...
-
Your elevator pitch is your quick, personal selling statement. It can be used when riding in an elevator with the person standing next to you, and can also serve as the foundation for cover letters,...
-
Sam's Souvenirs, Inc. sells souvenirs for $25 each. Sam's pays rent of $155 per month. Its raw materials cost $8 and its direct labor costs $6 for each souvenir. Two of Sam's recent electrical...
-
You are given the following information about the possible returns offered by the two stocks, Stock X and Stock Y for the year 2019. Scenario Probability Return from X Return from Y Economic...
-
Name five major retailers in the United States and discuss how consumers purchase retail products through the retailers and why ?Explain
-
In Problem 8.43, determine the smallest value of for which the rod will not fall out of the pipe. IA -3 in.-
-
Utilize the CFAT series and AW value to determine whether the investment exceeded the MARR. After 4 years of use, Procter and Gamble has decided to replace capital equipment used on its Zest bath...
-
For annual worth values of $30,000, $40,000, and $50,000 with chances of 20%, 20%, and 60%, respectively, the expected AW is closest to: (a) $34,000 (b) $40,000 (c) $44,000 (d) $48,000
-
A low-cost noncontact temperature measuring tool may be able to identify railroad car wheels that are in need of repair long before a costly structural failure occurs. If BNF Railroad saves $100,000...
-
The Brian B. Sand & Zachary B. Sand Joint Trust (the Trust) sued the Biotechnology Value Fund (BVF) under Section 16(b) of the Securities Exchange Act of 1934. Mark Lampert controlled BVF as well as...
-
John Marshall and Alan Tucker began working together at Marshalls financial consulting firm in approximately 1995, and they renamed the firm Marshall, Tucker & Associates, LLC. In addition to working...
-
Ariad Pharmaceuticals, Inc. (Ariad), is a small Cambridge-based pharmaceutical company whose shares are traded on the Nasdaq exchange. Maureen Curran joined Ariad in 2006 and eventually became the...
Study smarter with the SolutionInn App