Question 1
The Profit and loss account of Wise Ltd for the year ended 31/12/2019 shows the following:
Sales 80 000
Less COGS 15 000
Gross profit 65 000
Less Expenses
Donations 1 500
Advertisements 390
Depreciation 5 000
Legal fees 500
Rent 100
Interest on overdraft 4 300
Insurance 5 600
Wages 4 330
Bank fee 700 22 420
Operating profit 42 580
ADD OTHER INCOME
Gain from sale of asset 4 100
Net profit $46 680
Additional information:
• Depreciation for tax purpose $ 8000.
• Gain on sale for tax purpose $ 1800.
• Loss carried forward (3 years) $ 4 000.
• Tax paid in advance $ 10 700.
• Donation was to an approved charity organization. Legal fees were incurred to buy a
building from ANZ bank;
• Tax rate 20%.
Required:
a. Calculate the taxable income for Wise Ltd as at 31/12/2019.
b. Calculate the tax liability.

Question 2
Partnership Taxation- Resident & Non Resident
XYZ started a supermarket business under a partnership agreement stating profit & Loss sharing ratio of 4:3:3. During the financial year 2019, the following transaction has taken place amounting to:
Sales 3509583
Sales Returns -42050
Purchases 1960050
Advertising 25000
Repairs & Maintenance-Motor Vehicle (For vehicles used in business) 22000
Telephone 15500
Utility 14000
FNPF 40000
Salaries & Wages 350000
Business Licence 150
Town & City Rates 2200
Bank Charges 4500
Interest 27000
Insurance Premiums 10400
Discount Given 11000
Miscellaneous Expenses 9000
Additional Information
 Closing stock 31/12/2015 $110,000
 Opening stock 1/1/2019 $ 30,000
 Partner X also earns consultation revenue of $ 12,000 per annum.
 X and Y are residents and Z is a nonresident partner.
Required:
 -Prepare the Profit and loss statement for XYZ Limited supermarket.
- Calculate the Tax Liability of each partner for the year 2019.

Question 3
Fong Lee owns a rental property worth $5,000,000. Upon his death, all his property will be under the trust business and as per his final will he has appointed a trustee Mr. Wong Lee, who will manage his property and allocate equally to his married wife (Ann Lee) and 3 children name Kenlee, Chong lee, Florence Lee. On 1st January 2019, he died in an accident.
Trust has:
Rental income of $200,000 each year from his property. With respect to rental property, he incurred cost of insurance $5000, depreciation cost of       $10,000, rates of $2,500, lease cost of $8,000.  Investment in local finance company worth $550,000 earning interest of 10% yearly. Invested in shares in the local company worth $500,000, earning dividend revenue of 10,000 per annum.
Required:
1. Calculate the trust income.
2. Prepare the Income-tax return for each beneficiary for 2019.
 
 

Transcribed Image Text:

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Answer rating: 100% (QA)

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