Vitality Creations Ltd is a limited company involved in the manufacture of fruit juices in Belize. It
Question:
Vitality Creations Ltd is a limited company involved in the manufacture of fruit juices in Belize. It recognizes that it must pay business tax on the firm’s monthly sales. However, it has come to realize that it can obtain Tax Credits towards Monthly Business Tax due if the company suffers a trade loss and if the loss is approved by the Director-General of the Belize Tax Service Department. The following is extracted from the firm’s trial balance for the year ended Dec. 31, 2018:
Fruit and other ingredient Purchases- 250,000
Insurance-15,000
Salaries & wages-225,000
Depreciation-100,000
Ending Inventory- Dec. 2018 - 145,000
Employer’s contribution- Soc. Sec. 10,000
Utilities 60,000
Sale of bottles of fruit juice 565,000
Material & Supplies 23,000
Transportation & Delivery Expenses 110,000
Employee Training 35,000
Security Expense 10,500
Professional Fees 10,000
Political Donation 30,000
Purchase of land to construct premises 200,000
Bank charges128,000
Rent Expense (actually paid in cash) 50,000
Rent accrued (but not paid at year-end) 22,000
Trade License 2,000
Opening Inventory- Jan. 2018 160,000
Business Tax Expense 9,888
- Notes:
The Tax Department accepted 85% of the Depreciation Claimed as Wear & Tear.
All other allowable expenses were accepted.
The Director-General completed the Review of the financials and issued her determination of the loss (in accordance with the IBTA) by December 2019.
The firm’s records of sales for the calendar year 2020 revealed the following.
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Required:
Determine a Profit & Loss Statement in accordance with the provisions of the Income & Business Tax Act (the IBTA).
From this, determine the tax loss and resulting credit (if any)
Amortize the Business Tax Due for the months Jan-Dec. 2020 according to the provisions of Section 115 of the IBTA
Principles of heat transfer
ISBN: 978-0495667704
7th Edition
Authors: Frank Kreith, Raj M. Manglik, Mark S. Bohn