The audited accounts of Possibility Limited at December 31, 2021, shows a profit of $4,200,000 after...
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The audited accounts of Possibility Limited at December 31, 2021, shows a profit of $4,200,000 after charging the following: Additional information: A. B. Depreciation Legal Fees Donations Bad Debts Foreign Travel Required: C. i. Legal fees are as follows: $ 650,000 $1,600,000 S 84,000 $ 312,000 $ 180,000 Expenses relating to bad debts recovered $1,000,000 Expenses relating to issue of new shares S 600,000 ii. The company donated $44,000 to a netball club not on the approved list published by TAJ and $40,000 to the University of the West Indies. iii. The bad debt expense is a percentage provision for the year. iv. Foreign travel expense was a honeymoon package for the CEO who got married during the year. v. Included in revenues is a refund of income tax of $150,000. vi. Capital allowance has been computed at $1,600,000. vii. Estimated tax payment of $250,000 for year of assessment 2021 was made by Possibility Limited. (10 marks) (7 marks) Compute Income tax payable/refundable for Possibility Limited for year of assessment 2021. (3 marks) Prepare the statement showing taxable profits/loss for income tax purposes. State the reason for doing each of the items adjusted against net profits. The audited accounts of Possibility Limited at December 31, 2021, shows a profit of $4,200,000 after charging the following: Additional information: A. B. Depreciation Legal Fees Donations Bad Debts Foreign Travel Required: C. i. Legal fees are as follows: $ 650,000 $1,600,000 S 84,000 $ 312,000 $ 180,000 Expenses relating to bad debts recovered $1,000,000 Expenses relating to issue of new shares S 600,000 ii. The company donated $44,000 to a netball club not on the approved list published by TAJ and $40,000 to the University of the West Indies. iii. The bad debt expense is a percentage provision for the year. iv. Foreign travel expense was a honeymoon package for the CEO who got married during the year. v. Included in revenues is a refund of income tax of $150,000. vi. Capital allowance has been computed at $1,600,000. vii. Estimated tax payment of $250,000 for year of assessment 2021 was made by Possibility Limited. (10 marks) (7 marks) Compute Income tax payable/refundable for Possibility Limited for year of assessment 2021. (3 marks) Prepare the statement showing taxable profits/loss for income tax purposes. State the reason for doing each of the items adjusted against net profits.
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Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Posted Date:
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