ACT-B414.docx - a Depreciation schedule 20 pool \$ 98,500 80,000 178,500 Balance b/f Addition IA(60 AA Balance c/f Total Add CBA(35,700 142,800 30 pool \$

ACT-B414.docx - a Depreciation schedule 20 pool \$ 98,500...

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a. Depreciation schedule 20% pool 30% pool \$ \$ \$ Balance b/f 98,500 124,000 Addition 80,000 178,500 110,000 250,000 484,000 IA (60%) (74 ,400 ) 74,400 409,600 AA (35,700) 122,800 158,500 Balance c/f 142,800 338,800 Total 481,600 Add: CBA 300,000 781,600 b. Profits tax computation 2018/19 \$ \$ Net profit per accounts before extraordinary item 1,250,000 Add: Accounting depreciation 180,000 Provision for bad debts 18,000 Special contribution to retirement scheme, 4/5*120,000 96,000 Property tax 100,000 Refurbishment expense 400,000 Donation to charitable organization 1,000,000 1,794,000 3,044,000 Less: Interest income 17,500 Dividend 150,000 Refurbishment expense 600,000 Tax payment 280,000 1,047,500 \ 1,996,500 Less: Depreciation allowances 781,600 1,214,900 Less: Donation to charitable organization 1,000,000 Assessable profit 214,900 Profits tax payable at 16.5% 35,458.5 Less: Property tax set off 10,000 Net profits tax payable 25,458.5
c. 1) Interest expense on an unsecured bank loan from Standard Chartered Bank isinterest expense to a financial institution or an overseas financial institution which is deductible if it is not secured by a deposit; or if secured by a deposit, the interest derived from the deposit should be taxable in Hong Kong.

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