Company A is registered under Thai Laws. It is VAT registrant.

As of 2021 Company A has total revenue of 100,000,000 THB and an accounting net profit of 10,000,000 THB. The share capital of this company is 20,000,000 THB. During the tax filing, the chief accountant has discovered the below.

1. Dividend Income:

In September 2020, the company invested 30% of the share in Company Z (Thai Company)

In January 2021, the company received a dividend from Company Z of 500,000 THB. The accountant recorded this transaction as below

Dr. Cash 450,000

Dr. Withholding tax receivable 50,000

Cr. Dividend income 500,000

Record receipt of dividend from Company Z.

In May 2021, the company disposed the investment in Company Z.

2. Provision:

In December 2021, the company has the following transactions.

Dr. Doubtful accounts 900,000

Cr. Provision for doubtful accounts 900,000

Record provision for doubtful accounts for 2021.

Dr. Obsolete inventory 70,000

Cr. Provision for obsolete inventory 70,000

Record provision for obsolete inventory for 2021.

Dr. Audit fee 120,000

Cr. Accrued expense 120,000

Record audit fee for 2021.

3. The accountant forgot to record invoice number 2999. This invoice is Sales invoice for Sales in December for 500,000 THB (incl. VAT)
4. The accountant recorded purchase VAT for purchasing of inventory as expense for 80,000 THB.
5. Entertainment expense in 2021 is 500,000 THB. (incl. VAT).
6. In 2021, the company pays rental of truck at 40,000 THB per month (excl. VAT) for the whole year.
7. The company purchases a car for managing directors on 1 July 2021. The accountant booked depreciation for 800,000 THB. Cost of this car is 8,000,000 THB (incl. VAT).
8. The director decided to write off a receivable for 1,500,000 THB after pursuing for the collection. The accounting record is as below.

Dr. Doubtful accounts 750,000

Dr. Provision for doubtful accounts 750,000

Cr. Account receivable 1,500,000

Record writes off uncollected receivable

9. The company has loss carried forward as table below.

Year	Profit	Loss
2015		1,000,000
2016	500,000
2017	300,000
2018	200,000
2019		2,000,000
2020	1,000,000

10. Corporate income tax rate is 20%.

Instruction:

1. Write down your explanation for each finding from Chief accountant.
2. Calculate taxable net profit.
3. Calculate corporate income tax.

Answer rating: 100% (QA)

1 The company should not have recorded the dividend income as revenue as the investment in Company Z ... View the full answer