acy3161mte2009-10ans(wo_mark)

acy3161mte2009-10ans(wo_mark) - ACY3161 Mid-term Common...

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ACY3161 Mid-term Common Examination (2009/2010) Solution SCHOOL OF ACCOUNTANCY THE CHINESE UNIVERSITY OF HONG KONG ACY 3161 Taxation 2 nd Term, 2009/2010 MID-TERM EXAMINATION Solution Problem 1 (38%) (a) Mr. Chow’s salaries tax assessment 2007/08 (10%) 2007 /08 $ Salary and commission 1,100,000 School fees paid 20,000 Traveling allowance ($1,000 per month) 11,000 Second hand value of computer 10,000 Holiday passage 25,000 1,166,000 Less: Allowable traveling expenses (5,500) Allowable depreciation allowances (5,000 ) 1,155,500 Add: Value of quarters ($1,155,500 x 8%) ∆ - $15,000∆) 77,440 1,232,940 Less: Charitable donations (10,000) MPF Contribution (max) (12,000) Married person’s allowance (200,000) Child allowance (100,000 ) 910,940 Tax payable at progress tax rates $35,000 at 2% 700 $35,000 at 7% 2,450 $35,000 at 12% 4,200 Remainder at 17% 137,409 .8 144,359.8 or 144,359 Tax payable at standard rate $1,210,940 x 16% $193,750 .4 or $193,750 Tax payable at lower of $144,359 and $193,750 = $144,359 Tax payable after tax rebate (Max $25,000) = $119,359 (b) Mr. Chow’s salaries tax assessment 2008/09 (20%) $ Salary 1,200,000 Bonus 56,000 School fees paid 30,000 Traveling allowance 12,000 Reimbursement of removal expenses 18,000 Reimbursement of medical expenses 15,000 Salaries tax paid 119,359 1,450,359 Less: Allowable traveling expenses (6,000) Allowable depreciation allowances (4,000 ) 1,440,359 Less: Charitable donation (10,000) MPF contribution (12,000 ) File: KSK/ch FILE:/KSK/EXAM/ acy3161mte2009-10ans.docx 2/7/1214:44:51 Page 1 of 6
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ACY3161 Mid-term Common Examination (2009/2010) Solution 1,418,359 less : Basic allowance (108,000) Child allowance (100,000 ) 1,210,359 Tax at standard rate 1,418,359 x 15% 212,753 Tax at progressive tax rate 193,761 (40,000 x 2%) + (40,000 x 7%) + (40,000 x 12%) + (1,090,339 x 17%) = 193,761.63 Salaries tax payable by Mr. Chow before tax rebate 193,761 Mrs. Chow’s salaries tax assessment 2008/09 Salary ($25,000 x 8) $200,000 Less: MPF contribution (10,000 ) 190,000 Less: Basic allowance (108,000 ) 82,000 Tax at standard rate 190,000 x 15% 28,500 Tax at progressive tax rate (40,000 x 2%) + (40,000 x 7%) + (2,000 x 12%) 3,840 Salaries tax payable by Mrs. Chow before tax rebate 3,840 Mr. Chow and Mrs. Chow’s salaries tax payable under joint assessment Mr Chow Mrs Chow Total Income 1,440,359 200,000 1,640,359 Less: Donation (10,000) MPF contributions (22,000 ) 1,608,359 Less: Married Person allowance (216,000) Child allowance (100,000 ) 1,292,359 Tax at standard rate 1,608,359 x 15% = 241,253.85 241,253 Tax at progressive tax rates 40,000 x 2% 800 40,000 x 7% 2,800 40,000 x 12% 4,800 1,172,359 x 17% 199,301 .03 207,701 .03 or 207,701 Tax payable at lower of $207,701 or $241,253 = $207,701 Before tax rebate It is for the couple to choose “separate taxation”. (For information only)
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This note was uploaded on 02/04/2012 for the course ACCT 3161 taught by Professor Kwong during the Spring '11 term at CUHK.

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acy3161mte2009-10ans(wo_mark) - ACY3161 Mid-term Common...

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