- 20 Marks
ATP – Feb 2017 – L3 – Q5 – Corporate Tax Computation
Compute chargeable income and tax liability for Ashie Mart Limited for 2015.
Question
The Income Statement of Ashie Mart Limited, a supermarket in Accra for the year ended 31st December submitted to Commissioner of Domestic Tax Revenue Division of Ghana Revenue Authority on 30th April 2016.
| GH¢ | GH¢ |
|---|---|
| Gross Operation Profit | |
| Profit on Sale of Assets | |
| Less General Administration Expenses | |
| Salaries and Wages | 540,000 |
| Rent | 30,000 |
| Insurance | 34,000 |
| Acquisition | 16,000 |
| Painting of Premise | 36,000 |
| Loans to Staff written off | 18,000 |
| Advertisement (Note 1) | 24,000 |
| Staff Welfare (Note 2) | 52,000 |
| Travelling and Transport | 40,000 |
| Donations and Subscription (Note 3) | 32,000 |
| Bad Debts (Note 4) | 19,000 |
| Depreciation | 42,000 |
| (885,300) | |
| Net Profit |
The following notes relate to the Accounts:
| Note 1 Advertisement | GH¢ |
|---|---|
| a. Cost of Neon Sign | 10,200 |
| b. Media Advert | 14,300 |
| 24,500 |
| Note 2 Staff Welfare | GH¢ |
|---|---|
| a. Refund of Staff Medical Bills | 25,000 |
| b. Safety Wear Acquired for staff | 8,600 |
| c. Canteen Equipment | 16,900 |
| 50,500 |
| Note 3 Donations and Subscriptions | GH¢ |
|---|---|
| a. Donation to the Ghana Heart Foundation | 20,000 |
| b. Goods given gratis to Customs Officials | 6,000 |
| c. Subscription to Ghana Manufactures Association | 6,000 |
| 32,000 |
| Note 4 Bad Debts | GH¢ |
|---|---|
| a. General Provision | 12,000 |
| b. Specific Provision | 7,500 |
| 19,500 |
Note 5: The Capital Allowance as agreed with the Ghana Revenue Authority for the year is GH¢ 6,500.
Note 6: The company had during the year paid a total of GH¢ 2,600.
Required:
Compute the Chargeable income and Tax liability of Ashie Mart Limited for the 2014 Year of Assessment. (20 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Capital Allowanc, chargeable income, Tax Liability
- Level: Level 3
- Topic: Income Tax Computation
- Series: FEB 2017
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