Question Tag: Tax computation

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  • 20 Marks

STP – Feb 2018 – L2 – Q4- Taxation and Operating Strategies

Calculate Honson Plc's tax liability for Kumasi/Accra, advise on Nsawam, and discuss non-tax factors for facility location.

Honson Pic, a UK-based manufacturing company, is planning to build a new processing facility in Ghana. The Chief Executive Officer in a meeting with Management needs to decide whether to cite the facility in Accra or in Kumasi. Market intelligence has no preference for citing the facility either in Kumasi or Accra since information gathered indicate that business activities would largely be same in Kumasi and Accra for the next 10 years.

The following forecast information is relevant for the decision-making process being considered by management.

Kumasi Accra GH¢ GH¢

Required: i. Calculate Hamson Plc’s income tax liability for each proposed location for the first year. ii. Would you advise Hamson Plc to consider citing the facility in Nsawam, taking into consideration the close proximity of Nsawam to Accra? iii. Discuss three (3) non-tax factors that Hamson UK Plc may consider in the decision-making process to locate the facility either in Kumasi, Accra or elsewhere in the country.

b). With reference to the Income Tax Act, 2015 (Act 896) explain the following: i. Private Ruling issued by the Commissioner-General: (2 marks) ii. Conditions under which a Private Ruling will be binding on the Commissioner-General and on the person to whom the Private Ruling is issued.

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  • 20 Marks

STP – Aug 2012 – L3 – Q1 – Tax Computation

Compute tax liability for Jamaa Mining Company for 2008 and 2009 based on provided financials.

The profit and loss account of Jamaa Mining Company Ltd for the years ended December 2008 and 2009 are as tabled below:

Year Ended 31 December (all amounts in ‘000)
2009 GHC 2008 GHC
Turnover 309,000 430,000
Cost of Sales (164,000)
Gross Profit 145,000
General and Admin Exp (100,000)
Operating Profit 45,000
Other Income 5,300
Net Profit before tax 50,300
Income Tax provision 12,575
Transfer to Income Surplus 37,725
Income Surplus Account
Balance brought forward 46,945
Transfer from profit and loss account 9,220
Surplus carried forward 46,945

Notes:
2. Turnover is made up as follows
For year

2009 2008
Collected for year but included in prior year a/c 291,000
Interest income received for 18 months 0 18,000
309,000
  1. Cost of sales includes:

2009 2008
Withholding taxes paid 1,500 1,000
VAT unclaimed 6,000 8,000
Depreciation 43,000 25,000

4a. Gen and Admin expenses includes

2009 2008
Rent prepaid of 3,000
Rent outstanding 500 500

4b. Includes unrealized foreign exchange gain of but realized in 2009

2009 2008
2,000 2,000

The GRA has agreed a capital allowance of GHC20,000 for year 2009 and GHC15,000 for year 2008.

Required:
Please advise management of Jamaa Mining Company Ltd on the tax due to the GRA for the years 2009 and 2008.

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  • 20 Marks

ATP – Aug 2015 – L2 – Q4 – Income Tax Computation

Compute chargeable income for partners of Zee & Associates for 2012-2014, including capital allowances.

Ace, Brace and Crate have been in partnership since 2006 trading as Zee & Associates dealing in cement and preparing accounts to December 31 each year. Their Partnership Agreement showed that they share profits in the ratio 5:4:3 respectively.

The written-down values of the assets used in their operations as at 31st December, 2011 were as follows:

GH¢
Office Equipment 148,000.00
Pick–up vehicles 95,000.00
Saloon vehicles 80,000.00

Brace resigned from Zee & Associates on 2nd January 2013 and on his exit, Ace and Crate continued the business agreeing to share profits in the ratio 2:1 respectively.

The partnership Firm acquired the following additional assets:

a) A building for office annex costing GH¢430,000.00 on 4th October, 2013.

b) One Toyota Camry for GH¢85,000.00 on 26th March 2012

c) One Toyota Land Cruiser Prado at a cost of GH¢188,000.00 on 3rd July, 2013

Some of the office equipment were sold on 15th June, 2013 for GH¢35,000.00.

The Firm’s adjusted profits for tax purposes but before grant of capital allowance were as follows:

Year to 31/12/2012 GH¢315,000.00
Year to 31/12/2013 GH¢298,000.00
Year to 31/12/2014 GH¢328,000.00

You are required to compute the chargeable income, if any, of each partner for the relevant years of assessment on the assumption that no other incomes accrued to any of the partners.

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  • 5 Marks

PT – Nov 2024 – L2 – Q5b – Withholding Tax & VAT Calculation

Compute VAT and direct tax withheld on a taxable supply of medical consumables to a tax withholding agent.

Charley Chemist LTD made a taxable supply of medical consumables amounting to GH¢750,000 exclusive of VAT and levies on 23 November 2023 to the University of Ghana Medical Centre. The University of Ghana Medical Centre is a withholding tax agent for both VAT withholding and Direct Tax withholding.

Required:
i) Compute the amount of VAT withheld by the University of Ghana Medical Center. 
ii) Compute the amount of direct tax withheld by the University of Ghana Medical Centre.

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  • 10 Marks

PT – Nov 2024 – L2 – Q4a – Chargeable Income Computation

Compute the chargeable income and tax payable for Amasa Architecture and Building LTD for the 2022 and 2023 years of assessment.

Amasa Architecture and Building LTD has been in business for the past seven years. The following information relates to the company’s operations for the years ending 31 December 2022 and 2023.

DETAILS 2022 (GH¢) 2023 (GH¢)
Profit before tax 795,000 2,110,000
Provision for Depreciation 230,000 115,000
Donation to Manhyia Children Home (Approved by Social Welfare Department) 350,000 210,000
Donation towards 2023 Adae Kese Festival 105,000 150,000
Capital allowance agreed with the Ghana Revenue Authority 1,500,000 1,700,000
Withholding tax paid as contained in certificates received 10,000 25,000

Required:
Using the information provided above, compute the chargeable income and tax payable by Amasa Architecture and Building LTD for the years of assessment 2022 and 2023.

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  • 10 Marks

PT – Nov 2024 – L2 – Q3b – Capital Gains Tax and Asset Realization

Tax computation on asset realization and understanding taxable capital assets.

b) Kwamoso LTD sold the following assets to Mr. Badu on 18 May, 2023 for GH¢450,000 to settle a tax liability. Kwamoso LTD is not listed on the Ghana Stock Exchange.

Below are details of the assets:

Name of Asset Cost (GH¢) Net Book Value (GH¢) Market Value (18 May 2023) (GH¢) Market Value (31 Dec 2023) (GH¢)
Truck vehicle 750,000 480,000 320,000 350,000
Generator 60,000 29,400 8,400 8,000
Laptops 48,000 17,200 8,000 7,200

Required:

i) Compute the consideration received in respect of each asset realised.

ii) What constitutes capital assets in the context of capital gains tax in Ghana?

iii) Under what circumstance would there be a loss in the realization of a liability?

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  • 9 Marks

PT – Nov 2024 – L2 – Q2d – Withholding VAT Computation

Compute GETFund Levy, NHIL, COVID-19 Levy, output VAT, withholding VAT, and tax payable for a firm under the VAT scheme

N&L Associates, an accounting firm, issued an invoice to a withholding VAT agent for GH¢250,000 (including VAT, GETFund Levy, NHIL, and COVID-19 Levy) for assurance services provided to a client in March 2024. These were the only services provided by the firm during the period, and payments are to be made within the same period.

Required:

i) Calculate the portion of the GETFund Levy, NHIL, and COVID-19 Levy that the agent must compute for the payment of the services rendered. (3 marks)
ii) Determine the output VAT to be reported on the accounting firm’s monthly VAT return. 
iii) Compute the withholding VAT to be withheld if N&L Associates are VAT withholding agents. 
iv) Calculate the tax payable by the accounting firm if the total input tax for the period amounts to GH¢7,200.

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  • 7 Marks

ATAX – May 2017 – L3 – Q7b – Petroleum Profits Tax (PPT)

Explain "Memorandum of Understanding" in PPT computation and highlight the Year 2000 MOU details.

i. Describe briefly your understanding of the term “Memorandum of Understanding” as it applies to Petroleum Profits Tax computation. (3 Marks)

ii. State FOUR highlights of the Year 2000 Memorandum of Understanding. (4 Marks)

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  • 8 Marks

ATAX – May 2017 – L3 – Q6b – Corporate Tax Compliance and Reporting

Compute the Companies Income Tax liability for small businesses using the small business rate and explain the computations.

You have been provided with the following information in respect of THREE small businesses:

You are required to:
i. Compute the Companies Income Tax liability for each of the companies for the relevant assessment year, using the small business rate. (3 Marks)
ii. Give reasons for your computations. (5 Marks)

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  • 16 Marks

ATAX – May 2017 – L3 – Q3a – Capital Gains Tax (CGT)

Compute Capital Gains Tax for hire purchase transactions and explain the implications of hire purchase interest on CGT.

Global Company Nigeria Limited, a construction company based in Abuja, commenced business on January 7, 2009. The company has struggled to acquire necessary equipment due to poor financial results.

At a directors’ meeting on November 6, 2012, the company decided to approach a finance house for assistance. They provided the following information:

  • The company purchased an excavator on hire purchase on March 1, 2013, and paid a deposit of N32,000,000.
  • The excavator’s cost price was N55,000,000, with the balance payable in 25 monthly installments of N1,200,000 starting April 1, 2013.

The excavator was sold as follows:

  1. For N65,000,000 after installment payments on January 1, 2014.
  2. For N69,000,000 after installment payments on November 1, 2014.

You are required to:

i. Calculate the Capital Gains Tax (CGT) for the relevant Assessment Year, assuming the sales values above. (14 Marks)
ii. Explain the implications of hire purchase interest on Capital Gains Tax computations. (2 Marks)

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  • 20 Marks

AT – July 2023 – L3 – Q4 – Business income – Corporate income tax

Computing chargeable income and identifying relevant assumptions for a retail company.

The following relates to the financial records of Konadu Yiadom Company Ltd submitted to the Ghana Revenue Authority for the year ended 31 December 2021. The company is into retail operations.

Notes:

  1. The sales figure includes GH¢21,500 from the sale of old shop fittings which were replaced by new fittings during the year. The profit on the sale of the shop fittings was GH¢3,770.
  2. Following completion of the accounts, the accountant received an invoice dated 14 December 2021 in respect of goods for resale, which were delivered in late December. This invoice was not recorded, and you have been informed that the total amount on the invoice, including VAT, was GH¢15,110. VAT included on the invoice was GH¢440. All levies are inclusive.
  3. In June 2021, the company recognized the need to offer a special after-sales service to its customers. The company hired a new staff member and purchased a machine costing GH¢3,500 for the purpose. The local district assembly provided a grant to aid the purchase of the machine to the tune of GH¢1,250. The company included the cost of the machine in the purchases figure.
  4. Staff cost is the total wages and salaries paid to the staff. GH¢37,000 was paid to fresh graduates employed during the year. They constitute 4% of the total workforce for the year 2021.
  5. Promotion and Advertising is made up of:
    • Managing Director’s wedding reception: GH¢2,800
    • Refreshment during the opening of a new shop: GH¢5,000
    • Sample product to invited guests during the opening of the new shop: GH¢3,510
  6. Interest and Bank Payments are made up of:
    • Interest on loan used to purchase stock for the business: GH¢3,020
    • Overdraft interest on the business account: GH¢7,100
  7. Legal Fees are made up of:
    • Court fine resulting from traffic accident: GH¢3,950
    • Defense of company driver for careless driving: GH¢3,830
    • Litigation on business plot of land (90% chance of success): GH¢5,130
  8. Bad Debts are made up of:
    • Debt collection (Pursuing bad debts): GH¢455
    • Decrease in general bad debts provision: (GH¢1,250)
    • Increase in specific bad debts provision: GH¢1,800
  9. Motor Expenses are made up of:
    • Lease of a delivery van: GH¢11,500
    • Van running expenses: GH¢6,910
  10. Sundry Expenses are made up of:
  • Trade subscriptions: GH¢16,000
  • Support to elect a local Assembly Member: GH¢8,000
  • Provision for replacement of windows in the office: GH¢4,000
  • Gifts to customers during Christmas: GH¢6,000
  • Customer’s claim on defective goods: GH¢27,240
  • Provision for staff redundancy cost: GH¢25,000
  • Cost of investigating cash fraud: GH¢5,600
  • Investigation to acquire a new company: GH¢22,000

Additional Information:
The Ghana Revenue Authority has assessed and granted capital allowance of GH¢57,000 for the 2021 year of assessment.

Required:
You are required to compute the chargeable income for Konadu Yiadom Company Ltd for the 2021 year of assessment. Indicate clearly all necessary assumptions.

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  • 8 Marks

AT – July 2023 – L3 – Q1b – International taxation

Calculating the tax payable for a resident company with cross-border income from Ghana and Nigeria.

Libir Ltd is a resident company incorporated in Ghana. Its trading partners have been customers and suppliers from Ghana and also from Nigeria. The company supplies animal feed.

Its operation for 2021 year of assessment is as follows:
Income from Ghana: GH¢10,000,000
Income from Nigeria: ₦1,000,000,000

Additional information:

  1. Allowable expense granted by the Ghana Revenue Authority is GH¢6,000,000.
  2. The allowable expense in 1 does not include capital allowance of GH¢1,200,000 which was legitimately claimable by the company.
  3. The tax paid in Nigeria amounted to ₦40,000,000. The withholding taxes paid in Ghana with evidence of tax credit certificates amounted to GH¢1,000,000.
  4. The taxpayer has written to the Commissioner-General to relinquish its right under the double taxation arrangement.
  5. Exchange rate is GH¢1 = ₦60.

Required:
Compute the tax payable.

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  • 10 Marks

AT – Nov 2017 – L3 – Q4b – International taxation

Calculating the CIF and VAT/NHIL for imported goods.

Obiba JK Enterprise imports component parts from China and assembles them into various forms of office equipment. On 1 January 2016, component parts were imported with the following details:

Item Cost ($)
Cost of containers 2,200
Cost of packing for labor and materials 550
Cost of materials used in production 15,600
Cost of tools inserted in the components 3,750
Development and design costs 630
Royalties and licenses 330
Cost of labor and others in China 7,400
Shipping and transport to Tema Harbour GH¢16,200
Loading, unloading, and handling charges GH¢5,400
Cost of marine insurance GH¢2,958.30
Assembling overhead cost GH¢23,400
Fees for freight services to Tema Harbour GH¢3,700

Additional Information:

  • Trade discount of 2% on the cost of goods (not yet accounted for).
  • Excise duty of $560 paid in China (included in the labor cost).
  • Contingent discounts and rebates of 1% (already accounted for).
  • Technical assistance of GH¢3,000 after the goods arrived at the factory.
  • Average exchange rate was $1 = GH¢3.11.
  • Import duty is 20%.

Required:
i) Compute the Cost, Insurance, and Freight (CIF), clearly showing workings of each component.

(9marks)

ii) Compute the VAT/NHIL. (1 mark)

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  • 17 Marks

AT – Nov 2017 – L3 – Q2a – Business income – Corporate income tax

Calculating the assessable income and tax payable of Mr. Osei Bobie for the year 2016.

Mr. Osei Bobie, an amputee, was the Senior Accountant of Soroku Mine Company Limited (a mining company) for many years with a basic salary of GH¢54,000 per annum. He was entitled to a company vehicle, fuel, and driver.

He acted for the Director of Finance in March, April, and May 2016, during which month his salary was raised to GH¢5,000 per month.

Mr. Osei Bobie was housed in the company lavishly furnished accommodation on the mine.

He was also entitled to the following monthly allowances:

  • Professional allowance GH¢400
  • Responsibility allowance GH¢500

Mr. Osei Bobie resigned from Soroku Mine Limited on 30 June 2016. He received the following on his resignation:

  • He was allowed to take home the company’s pick-up he was using valued at GH¢5,000.
  • Cash gifts from staff GH¢6,100.

On 1 August 2016, he took up an appointment as Accounts Manager of Phinex Limited (a retailing company) on a salary of GH¢72,000 per annum. His other entitlements were agreed as follows:

  • Responsibility Allowance – GH¢150 per month
  • Cost of Living Allowance – GH¢200 per month
  • Risk Allowance – GH¢100 per month
  • Overtime Pay – GH¢250 per month
  • Bonus – GH¢1,500 in each December
  • Vehicle and fuel
  • Accommodation only

Mr. Osei Bobie finances the following insurance policies and also contributes to the Social Security and National Insurance Trust (SSNIT):

Insured Premium Sum Assured
Mrs. Gameli (sister) GH¢500 GH¢4,000
Mr. Osei Bobie GH¢3,600 GH¢35,000

Mr. Osei Bobie is not married, but he is responsible for his three children, who are all attending registered Senior High Schools. Mr. Osei Bobie supports his 72-year-old grandmother with GH¢300 per month despite her immense wealth. His grandmother depends entirely on him.

Required:
a) Compute the assessable income and tax payable of Mr. Osei Bobie for the year 2016. (17 marks)

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  • 20 Marks

AT – May 2017 – L3 – Q2 – Business income – Corporate income tax

Compute the chargeable income, explain adjustments, and compute tax payable for a self-employed individual.

Mr. George Amoako, a self-employed single parent with two children attending a private University in Ghana trades as George Amoako Enterprise. He commenced business on 1st January 2016 and submitted the following extracts of his financial statements for the year ended 2016:

Item Amount (GH¢)
Gross Profit b/d 20,420
Interest on savings account 2,020
Gifts received 1,500
Interest on treasury bills 790
Auditor’s fees 800
Depreciation of assets 1,200
Computers purchased 2,500
PAYE paid on his personal salary 450
Employee social security contribution (other staff) 396
Office rent 2,400
Personal salary (net) 7,200
Other staff wages 4,300
Stationery 852
Vehicle purchased for CEO’s personal use 18,000
Transport 1,300
Net Loss (14,668)
Total 24,730

Required:

a) Determine the Chargeable Income of Mr. George Amoako for 2016 year of assessment. (10 marks)

b) Support your computations with relevant explanations. (5 marks)

c) Compute all Taxes payable. (5 marks)

(Total: 20 marks)

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  • 20 Marks

AT – March 2023 – L3 – Q4 – Minerals and mining

Compute the taxes payable by Crystal Mining Ltd and advise on tax payment timelines and consequences of non-compliance.

Crystal Mining Ltd is a resident mining company operating in two mining areas in the Eastern and Western parts of Ghana under the name Alpha Ltd and Beta Ltd respectively. Crystal Mining Ltd has a shared processing facility for the two mining areas.

As part of efforts to increase its market share in the sector, it acquired a 40% stake in the operation of Omega Ltd, also a mining company in the Western part of Ghana.

Omega Ltd’s operations are in their early years, hoping to start production in the next three years. Crystal Mining Ltd commenced commercial operations in 2021.

The operational activity of Crystal Mining Ltd for the 2021 year of assessment is as follows:

Description GH¢
Gross Revenue 1,000,000,000
Cost of Operation (300,000,000)
Gross Operating Margin 700,000,000
Operating and Other Costs (340,000,000)
Net Margin 360,000,000
Add: Interest (net of taxes) on current account 1,000,000

Additional Information:

  • Gross Revenue included the sale of an asset worth GH¢2,000,000, whose cost of acquisition was GH¢1,287,000.
  • Gross dividend of GH¢400,000 was received from Axum Ltd, a company resident in Ghana, in which Crystal Mining Ltd holds 40% voting power. Axum Ltd engages in commerce. The dividend was added to the gross revenue above.
  • Revenue from tailings amounting to GH¢1,000,000 was added to the cost of operation.
  • Included in the cost of operation is the excess of financial cost from derivative of GH¢2,000,000 over financial gain from hedged arrangement of GH¢890,000.
  • For the acquisition of a 40% stake in Omega Ltd, Crystal Mining Ltd paid GH¢4,000,000. The amount was added to the cost of operation.
  • Research and development cost amounting to GH¢1,000,000 has been included in operational cost.
  • Depreciation, depletion, and amortization of GH¢6,000,000 were included in the operational cost above.
  • Overburdening stripping and shaft sinking cost of GH¢3,000,000 was added to Gross Revenue as a way of tax planning, according to the accountant. This cost was incurred prior to access to the resource in 2021.
  • Further information:
    • Reconnaissance and prospecting cost up to 2020 in respect of Alpha Ltd amounted to GH¢80,000,000 and was added to the cost of operation.
    • Reconnaissance and prospecting cost up to 2020 in respect of Beta Ltd amounted to GH¢78,000,000 and was added to the cost of operation.
    • Apart from Pay As You Earn (PAYE) from the staff, Crystal Mining Ltd has never paid taxes to the Ghana Government. This is a big concern to the Ministry of Lands and Natural Resources.

Required:
a) Compute the taxes payable by Crystal Mining Ltd and state any assumptions if any. (16 marks)
b) Advise the management of the company on when it must pay its taxes to the Ghana Revenue Authority. (2 marks)
c) What are the sanctions for non-adherence to the obligation of payment of taxes? (2 marks)

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  • 20 Marks

AT – May 2016 – L3 – Q1 – Tax administration in Ghana, Business income – Corporate income tax

Compute the tax liabilities and take-home pay for an employee provided various benefits and allowances for the 2014 Year of Assessment.

Mr. Frank Danso was employed by Ghana Trust Ltd on 1st September 2010 on a salary scale of GH¢4,500 x 500-7,500 as the financial controller of the company. He is provided with the following as part of his conditions of service for the 2014 Year of Assessment:

i) Well-furnished rented flat by his employers in respect of which he pays GH¢100 per month as rent by way of deductions at source.
ii) Watchman allowance of GH¢200 per annum, paid directly to Mr. Frank Danso.
iii) Risk allowance of GH¢905 per annum.
iv) Leave allowance of GH¢500 per annum.
v) Garden boy allowance of GH¢100 per quarter paid directly to Mr. Frank Danso.
vi) Medical allowance of GH¢680 per annum.
vii) Meals allowance of GH¢50 per month.
viii) Two maidservants each on wages of GH¢200 per annum. The amount is paid to the maid servants directly by the company.
ix) Bonus of 40% on annual basic salary.
x) Entertainment allowance of GH¢400 a year (accountable).
xi) Duty post allowance of GH¢100 per month.
xii) He has Life Assurance Policies with EIC Ltd. Below are the details:

Policy Sum Assured (GH¢) Annual Premium (GH¢)
A 4,000 420
B 2,800 240
C 16,000 1,650
D 5,000 525

xiii) He is entitled to a company car and fuel for both official and private use.
xiv) He has two wives and ten children; four of whom are in SHS in Accra, and the rest are gainfully employed; he caters for 3 of his aged relatives.
xv) He contributes 7% of his salary towards the company’s Provident Fund which has been approved by the National Pension Authority, and he also contributes 5.5% of his salary to the SSNIT.

Required:
a) Compute his tax liabilities for the 2014 Year of Assessment using 2014 rates.
(15 marks)

b) Determine his take-home pay for the 2014 Year of Assessment.
(5 marks)

Total: 20 marks

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  • 10 Marks

AT – Nov 2016 – L3 – Q4b – Business income – Corporate income tax

Calculate the tax payable by Bambara Ltd and comment on the treatment of specific income and expenses

b) Bambara Ltd has the following summarized income statement relating to the 2015 year of assessment:

GH¢
Revenue 100,000
Cost of Sales 65,000
Gross Profit 35,000
Operating expenses 20,000
Net profit 15,000

Upon a closer scrutiny, the following came up:

i) Dividend net of withholding tax received from A Ltd was GH¢10,000. The amount received was added to revenue above. Bambara Ltd has 10% equity interest in A Ltd.
ii) Bad debts of GH¢1,000 were recovered. This was adjusted to the Income Surplus Account.
iii) A penalty of GH¢2,000 was paid and has been added to operating costs to determine the net profit as disclosed.
iv) Capital allowance agreed with Ghana Revenue Authority was GH¢1,000, and depreciation of GH¢1,300 was added to operating costs.
v) Taxes paid in previous quarters amounting to GH¢1,200 were added to operating costs to determine the net profit.
vi) It came to light that an amount of GH¢11,400 net of 5% withholding tax relating to the supply of goods was not brought into the accounts at all on account of omission. The withholding tax was certified correct.

Required:
Determine the tax payable by Bambara Ltd and comment on any four reasons for the inclusion and/or non-inclusion of the transactions in the determination of income. (10 marks)

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  • 10 Marks

AT – Nov 2016 – L3 – Q1a&b – Business income – Corporate income tax

Calculate the tax due to GRA for the year 2014 based on the income statement of Samada Insurance Company.

You have been appointed as the Tax Manager of Samada Insurance Company. The Executive Director has expressed his persistent worry with the Chief Accountant to accurately calculate the company’s tax obligations to agree with what is assessed by the Ghana Revenue Authority each year. He has thus, provided you with the Income Statement below for your consideration and advice.

SAMANDA INSURANCE COMPANY LIMITED
Income Statement for the years ended 2013 and 2014

  1. Additional Information:
    i) Capital allowance agreed for the year 2014 was GH¢2,450,000
    ii) Reserve is calculated at 40% of Net premium.

Required:
a) Compute the tax due to the GRA for 2014 year of Assessment. (8 marks)

b) Support your computations with relevant explanations. (2)

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