Sole Proprietorship – Page 2

TAX – Nov 2020 – L1 – SA – Q1a – Taxation of Partnerships and Sole Proprietorships

Compute the assessable profit or loss for Kayode Oluwa Enterprises for the relevant years.

Question

a. Mr. Kayode Oluwa, a civil engineer, worked for XYZ Nigeria Limited for many years. He retired as the Chief Civil Engineer in 2010. He registered his enterprise under the name of Kayode Oluwa Enterprises and commenced business in 2011.

He appointed you as his tax consultant and submitted his financial records showing the following results:

Year Ended December 31	Amount (N)
2015	1,360,000
2016	(1,900,000)
2017	2,300,000
2018	2,700,000

Required:
Compute the assessable profit/(loss) for the relevant years of assessment. (12 Marks)

Answer

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Tags: Assessable Profit, Financial Records, Loss carry forward, Sole Proprietorship, Tax computation
Level: Level 1

Topic: Taxation of Partnerships and Sole Proprietorships
Series: NOV 2020

BMF – Nov 2014 – L1 – SB – Q1 – Business and Organizational Structures and Choices

Discuss the features of a sole proprietorship and the characteristics of a public limited liability company.

Question

The business environment comprises a diversity of business organizations ranging from very simple enterprises to huge multinational corporations.

a. Identify FIVE features of a sole proprietorship. (10 Marks)
b. Identify FIVE characteristics of a Public Limited Liability Company. (10 Marks)

(Total 20 Marks)

Answer

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Tags: Business Structures, Public Limited Liability Company, Sole Proprietorship
Level: Level 1

Topic: Business and Organizational Structures and Choices
Series: NOV 2014

BMIS – Nov 2019 – L1 – Q1a – The Business Organization and its Stakeholders

Explain three business types available to individuals venturing into business.

Question

Kofi Stone, Ama Black and Adwoa Sika who were your students at the Ultimate Business School have decided to venture into business after their National Service which ends in the next three months. They have approached you for your advice on the type(s) of business(es) which they should invest in, considering the country’s economic environment.

Required:
Explain THREE (3) business types available to them. (6 marks)

Answer

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Tags: Business Types, Limited Liability Company, Partnership, Sole Proprietorship
Level: Level 1

Topic: The Business Organisation and its Stakeholders
Series: NOV 2019

BL – Nov 2022 – L1 – SB – Q1b – Company Law

Explaining the main features of sole proprietorship as a business organization.

Question

The Companies and Allied Matters Act (CAMA) recognizes different forms of business organizations.

Required:
Explain briefly three main features of sole proprietorship as a business organization.

Answer

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Tags: Business Formation, Company Law, Sole Proprietorship
Level: Level 1

Topic: Company Law
Series: NOV 2022

BL – May 2022 – L1 – SA – Q4 – Partnership Law

Identify the fundamental ground that distinguishes a partnership from a sole proprietorship.

Question

A fundamental ground upon which a partnership is distinct from a sole-proprietorship is
A. Authorised share capital
B. Financial accounts
C. Asset turnout
D. Debt recovery procedure
E. Legal minimum of membership

Answer

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Tags: Legal Membership, Partnership Law, Sole Proprietorship
Level: Level 1

Topic: Partnership Law
Series: MAY 2022

FA – May 2021 – L1 – SB – Q5a – Roles of Accountants in Business and the Economy

Explain seven advantages of a limited liability company over a sole proprietorship business.

Question

The nature and structure of business entities determine largely their accounting systems and processes.

On the basis of the above, you are required to explain seven advantages of a limited liability company over a sole proprietorship business.

Answer

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Tags: Business Entities, Company Structure, Limited Liability, Sole Proprietorship
Level: Level 1

Topic: Roles of Accountants in Business and the Economy
Series: MAY 2021

PT – Mar 2024 – L2 – Q3b – Income Tax Liabilities

State the basis periods for a sole proprietorship, company, trust, and partner in a partnership.

Question

State the Basis Periods for the following persons as provided in the Income Tax Act, 2015 (Act 896):

i) A sole proprietorship
ii) A company
iii) A trust
iv) A partner of a partnership

Answer

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Tags: Basis Period, Company, Income Tax Act, Partnership, Sole Proprietorship, Trust
Level: Level 2

Topic: Income Tax Liabilities
Series: MAR 2024

AT – May 2020 – L3 – Q5c – Tax planning

Explain how the income of Lydia Waakye, a 16-year-old sole proprietress with a supermarket shop, will be subject to tax

Question

Lydia Waakye aged 16 years old is a sole proprietress with a big super market shop and makes income of an amount of GH¢40,000 per annum over the last 3 years.

Required: How will the income be subject to tax?

Answer

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Tags: Minor's income, Sole Proprietorship, Tax liability of minors
Level: Level 3

Topic: Tax planning
Series: MAY 2020

AT – NOV 2021 – L3 – Q1c – Tax Planning

Outlines tax planning measures that can be used to reduce tax liability for a sole proprietorship business.

Question

Evaluate FOUR (4) tax planning measures that you can adopt in your desire to form a sole proprietorship business. (4 marks)

Answer

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Tags: Personal Deductions, Sole Proprietorship, Tax Planning, Tax Reliefs, Tax Savings
Level: Level 3

Topic: Tax planning
Series: NOV 2021

AT – MAR 2024 – L3 – Q5b – Tax Administration in Ghana

Discusses the restrictions on foreign business activities and the tax benefits of sole proprietorship versus limited liability companies.

Question

You are an external consultant to the Ministry of Trade and Industry. The Minister has received a delegation of both foreigners and Ghanaians to deliberate on investment opportunities available in Ghana.

Required:
i) Business activities that cannot be engaged in by foreigners. (5 marks)
ii) The tax benefits of establishing a sole proprietorship business as against a limited liability company. (5 marks)

Answer

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Tags: Business Restrictions, Business Structures, Foreign Investment, Foreigners, Limited Liability Company, Sole Proprietorship, Tax Benefits
Level: Level 3

Topic: Tax administration in Ghana
Series: MAR 2024

AT – Dec 2023 – L3 – Q2b – Tax planning

Discussing tax planning opportunities available to sole proprietorships that are not available to limited liability companies.

Question

Tax planning opportunities are available to all persons. All business units may not have the same tax planning opportunities, hence the need to carefully select a business unit that may provide the intended benefits to the owner or owners.

Required:
Discuss FOUR (4) tax planning opportunities available to sole proprietorships which may not be available to limited liability companies.

Answer

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Tags: Corporate Taxation, Personal reliefs, Sole Proprietorship, Tax Benefits, Tax Planning
Level: Level 3

Topic: Tax planning
Series: DEC 2023

BCL – Nov 2019 – L1 – Q2c – Alternative forms and constitutions of business organisations

List of particulars required for sole proprietorship registration with the Registrar-General.

Question

List FOUR (4) particulars for registration with the Registrar-General by a sole proprietor. (4 marks)

Answer

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Tags: Business Registration, Legal Requirements, Sole Proprietorship
Level: Level 1

Topic: Alternative forms and constitutions of business organisations
Series: NOV 2019

BCL – Nov 2019 – L1 – Q2b – Alternative forms and constitutions of business organisations

Advantages and disadvantages of forming a sole proprietorship.

Question

It appears that many Ghanaians prefer to own their businesses without going through the cumbersome details of forming an incorporated company limited by shares.

Required:
State TWO (2) advantages and TWO (2) disadvantages of forming sole proprietorship. (4 marks)

Answer

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Tags: Business Advantages, Business Disadvantages, Business Formation, Sole Proprietorship
Level: Level 1

Topic: Alternative forms and constitutions of business organisations
Series: NOV 2019

BMIS – May 2017 – L1 – Q1b – Business and organisational structure

Identify characteristics of sole proprietorships, partnerships, and limited companies.

Question

b) Identify TWO characteristics each of the following business set ups.
i) Sole proprietorship.
ii) Partnership.
iii) Limited companies.
(6 marks)

Answer

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Tags: Business Structures, Limited Companies, Partnership, Sole Proprietorship
Level: Level 1

Topic: Business and Organisational Structure
Series: MAY 2017

FA – Nov 2018 – L1 – Q7 – Preparation of financial statements of a sole trader | Preparation of limited liability company financial statements

Explain the advantages of a limited liability company over a sole proprietorship and describe different types of shares and debentures.

Question

a) State FOUR (4) advantages a Limited Liability Company has over a Sole Proprietorship.
(6 marks)

b) Explain the following:
i) Issued Shares
ii) Preference Shares
iii) Ordinary Shares
iv) Debentures
(14 marks)

Answer

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Tags: Company Structures, Debentures, Shares, Sole Proprietorship
Level: Level 1

FA – Nov 2017 – L1 – Q5 – Preparation of limited liability company financial statements | Non-current assets and depreciation

Prepare the Statement of Profit or Loss and Statement of Financial Position for Bob & Sons as of December 31, 2016, including necessary adjustments.

Question

The following trial balance was extracted from the ledger account of Bob & Sons, a sole proprietor, as at 31 December 2016:

Trial Balance as at 31 December 2016

Account	Debit (GH¢)	Credit (GH¢)
Building, at cost	650,000
Office equipment at cost	135,000
Plant and Machinery	263,500
Accumulated depreciation
– Building		39,000
– Office equipment		27,000
– Plant and Machinery		65,875
Purchases	248,000
Sales		500,000
Inventory 1 January 2016	27,500
Discount allowed	4,800
Returns inwards	3,200
Wages and Salaries	64,885
Rent	5,580
Insurance	6,000
Trade receivables	145,000
Trade payables		132,750
Provision for bad debt		24,840
Bank overdraft		58,956
Cash in hand	5,400
Long-term loan		350,000
Capital 1 January 2016	1,558,865	360,444 1,558,865

Additional Information:

i) Inventory as at December 2016 was valued at GH¢24,000.
ii) Insurance was paid for 15 months ending 31 March 2018.
iii) 3 months rent is outstanding. The agreed amount per month is GH¢620.
iv) Included in wages and salaries is an amount of GH¢2,500 withdrawn by the owner. Secondly, the cleaner has not been paid his salary for December 2016 as at the end of the year. His monthly salary is GH¢500.
v) Interest on capital per annum is 15% and is yet to be recorded.
vi) Depreciation for the year ended 31 December 2016 has not been charged as follows:

Building 3% per annum using the straight-line method.
Office equipment 20% using the reducing balance method.
Plant and machinery 25% using the reducing balance method.

Required:

a) Prepare Bob & Sons’ Statement of Profit or Loss account for the year ended 31 December 2016. (8 marks)
b) Prepare the Statement of Financial Position as at that date. (12 marks)

Answer

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Tags: Depreciation, Financial Statements, Sole Proprietorship
Level: Level 1

Topic: Non-current assets and depreciation, Preparation of limited liability company financial statements
Series: NOV 2017

Question Tag: Sole Proprietorship

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TAX – Nov 2020 – L1 – SA – Q1a – Taxation of Partnerships and Sole Proprietorships

Compute the assessable profit or loss for Kayode Oluwa Enterprises for the relevant years.

You're reporting an error for "TAX – Nov 2020 – L1 – SA – Q1a – Taxation of Partnerships and Sole Proprietorships"

BMF – Nov 2014 – L1 – SB – Q1 – Business and Organizational Structures and Choices

Discuss the features of a sole proprietorship and the characteristics of a public limited liability company.

You're reporting an error for "BMF – Nov 2014 – L1 – SB – Q1 – Business and Organizational Structures and Choices"

BMIS – Nov 2019 – L1 – Q1a – The Business Organization and its Stakeholders

Explain three business types available to individuals venturing into business.

You're reporting an error for "BMIS – Nov 2019 – L1 – Q1a – The Business Organization and its Stakeholders"

BL – Nov 2022 – L1 – SB – Q1b – Company Law

Explaining the main features of sole proprietorship as a business organization.

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BL – May 2022 – L1 – SA – Q4 – Partnership Law

Identify the fundamental ground that distinguishes a partnership from a sole proprietorship.

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FA – May 2021 – L1 – SB – Q5a – Roles of Accountants in Business and the Economy

Explain seven advantages of a limited liability company over a sole proprietorship business.

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PT – Mar 2024 – L2 – Q3b – Income Tax Liabilities

State the basis periods for a sole proprietorship, company, trust, and partner in a partnership.

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AT – May 2020 – L3 – Q5c – Tax planning

Explain how the income of Lydia Waakye, a 16-year-old sole proprietress with a supermarket shop, will be subject to tax

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AT – NOV 2021 – L3 – Q1c – Tax Planning

Outlines tax planning measures that can be used to reduce tax liability for a sole proprietorship business.

You're reporting an error for "AT – NOV 2021 – L3 – Q1c – Tax Planning"

AT – MAR 2024 – L3 – Q5b – Tax Administration in Ghana

Discusses the restrictions on foreign business activities and the tax benefits of sole proprietorship versus limited liability companies.

You're reporting an error for "AT – MAR 2024 – L3 – Q5b – Tax Administration in Ghana"

AT – Dec 2023 – L3 – Q2b – Tax planning

Discussing tax planning opportunities available to sole proprietorships that are not available to limited liability companies.

You're reporting an error for "AT – Dec 2023 – L3 – Q2b – Tax planning"

BCL – Nov 2019 – L1 – Q2c – Alternative forms and constitutions of business organisations

List of particulars required for sole proprietorship registration with the Registrar-General.

You're reporting an error for "BCL – Nov 2019 – L1 – Q2c – Alternative forms and constitutions of business organisations"

BCL – Nov 2019 – L1 – Q2b – Alternative forms and constitutions of business organisations

Advantages and disadvantages of forming a sole proprietorship.

You're reporting an error for "BCL – Nov 2019 – L1 – Q2b – Alternative forms and constitutions of business organisations"

BMIS – May 2017 – L1 – Q1b – Business and organisational structure

Identify characteristics of sole proprietorships, partnerships, and limited companies.

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FA – Nov 2018 – L1 – Q7 – Preparation of financial statements of a sole trader | Preparation of limited liability company financial statements

Explain the advantages of a limited liability company over a sole proprietorship and describe different types of shares and debentures.

You're reporting an error for "FA – Nov 2018 – L1 – Q7 – Preparation of financial statements of a sole trader | Preparation of limited liability company financial statements"

FA – Nov 2017 – L1 – Q5 – Preparation of limited liability company financial statements | Non-current assets and depreciation

Prepare the Statement of Profit or Loss and Statement of Financial Position for Bob & Sons as of December 31, 2016, including necessary adjustments.

You're reporting an error for "FA – Nov 2017 – L1 – Q5 – Preparation of limited liability company financial statements | Non-current assets and depreciation"

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