Taxation Assignment Kangi is an employee of ABC Ltd. He has provided the following details of...
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Taxation Assignment Kangi is an employee of ABC Ltd. He has provided the following details of his employment income and other benefits for the year ended 31 December 2023. 1. Monthly salary Sh. 240,000 (PAYE SH.34, 100) 2. School fees for his daughter amounting to Sh. 64,000 was paid by the employer 3. His monthly salary was increased on 1st September 2023, by sh. 20,000. 4. The company provided him with airtime worth Sh. 5,000 per month. It was estimated that 40% of his calls were non-business related. 5. Passage to facilitate his family to move from South Africa to Kenya was sh. 150,000 6. A house whose monthly rental value was sh. 100,000 7. A life insurance cover whose annual Insurance premium amounted to Sh. 72,000. He contributed a similar amount to the insurance company 8. A motor vehicle (2000cc) whose cost was Sh. 600,000 at the time of purchase on 1st January 2019. 9. Kangi controls 15% of the share capital of the company. The company gave the wife free gifts valued at sh.25, 000 during the end of year party. 10. He is a member of the company's registered pension scheme where he contributes 20% of his basic salary. The employer contributes equal amount. 11. The company gave him a loan of 5,000,000 at an interest rate of 4% per annum. The market interest rate is 9% per annum. 12. The company paid medical bills of sh. 1,000,000 following his own hospitalization. The company's medical scheme only covers top managers. 13. Kangi's other incomes included Farming profit, Sh. 300,000 and Rental income Sh. 240,000 Required: Compute the following for the year ended 31st December 2023 i. Taxable income for Kangi ii. Tax liability (if any) on the income in (i) above. iii. Highlight any assumptions you may have made when computing the taxable income in (i) above Taxation Assignment Kangi is an employee of ABC Ltd. He has provided the following details of his employment income and other benefits for the year ended 31 December 2023. 1. Monthly salary Sh. 240,000 (PAYE SH.34, 100) 2. School fees for his daughter amounting to Sh. 64,000 was paid by the employer 3. His monthly salary was increased on 1st September 2023, by sh. 20,000. 4. The company provided him with airtime worth Sh. 5,000 per month. It was estimated that 40% of his calls were non-business related. 5. Passage to facilitate his family to move from South Africa to Kenya was sh. 150,000 6. A house whose monthly rental value was sh. 100,000 7. A life insurance cover whose annual Insurance premium amounted to Sh. 72,000. He contributed a similar amount to the insurance company 8. A motor vehicle (2000cc) whose cost was Sh. 600,000 at the time of purchase on 1st January 2019. 9. Kangi controls 15% of the share capital of the company. The company gave the wife free gifts valued at sh.25, 000 during the end of year party. 10. He is a member of the company's registered pension scheme where he contributes 20% of his basic salary. The employer contributes equal amount. 11. The company gave him a loan of 5,000,000 at an interest rate of 4% per annum. The market interest rate is 9% per annum. 12. The company paid medical bills of sh. 1,000,000 following his own hospitalization. The company's medical scheme only covers top managers. 13. Kangi's other incomes included Farming profit, Sh. 300,000 and Rental income Sh. 240,000 Required: Compute the following for the year ended 31st December 2023 i. Taxable income for Kangi ii. Tax liability (if any) on the income in (i) above. iii. Highlight any assumptions you may have made when computing the taxable income in (i) above
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Auditing Assurance Services and Ethics in Australia an Integrated Approach
ISBN: 978-1442539365
9th edition
Authors: Alvin A Arens, Peter J. Best, Greg Shailer, Brenton Fiedler
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