James was a sole trader. He presented his income statement to KRA. Revenues Cost of sales 6,000,000
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Question:
James was a sole trader. He presented his income statement to KRA.
Revenues | ||
Cost of sales | 6,000,000 | |
Gross profit | 2,600,000 | |
Operating expenses | 3,400,000 | |
Administrative expenses | 1,200,000 | |
Donations | 300,000 | |
Amortization expense | 200,000 | |
Preliminary expenses | 100,000 | |
Purchase of furniture | 2,000,000 | |
Depricication | 500,000 | |
Provision for bad debts | 150,000 | |
Allocation costs | 70,000 | |
Bad debts | 120,000 | |
Total expenses | 4,640,000 | |
Net Loss | 1,240,000 | |
Required
I) Ascertain the taxable income of James for the year 2022.
II) Compute the tax liability of James for the year of income 2022.
III) Explain the tax terminology Pay As You Earn (PAYE).
Related Book For
Understanding Financial Accounting
ISBN: 978-1118849385
1st Canadian Edition
Authors: Christopher Burnley, Robert Hoskin, Maureen Fizzell, Donald
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