ACCT3161ass1_1011_1st-1

ACCT3161ass1_1011_1st-1 - THE CHINESE UNIVERSITY OF HONG...

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THE CHINESE UNIVERSITY OF HONG KONG School of Accountancy ACCT 3161 – Taxation (1 st Term, 2010-2011) Assignment 1 Due Date: October 7, 2010 (Thursday) Question 1 The following particulars relate to the two properties owned by Mr Fu. Property A This is an office premises bought on 1 October 2006. It was let to Brillant Ltd on 1 November 2006 on the following terms: (i) Term of lease: three years from 1 November 2006. (ii) Rent free period: 1 November 2006 to 30 November 2006. (iii) Monthly rent: $60,000 payable in advance. (iv) Rates: $9,000 per quarter (payable by tenant). (v) Management fee: $4,000 per month (payable by tenant). Starting from 1 February 2007, Brillant Ltd failed to pay any rent to Mr Fu nor any management fees to the building management company. On 1 April 2007, Mr Fu instigated proceedings for recovery of the unpaid rent. On 1 May 2007, Brillant Ltd suddenly moved out and disappeared. Mr Fu had to pay all the overdue management fees, totaling $12,000, to the management company on Brillant Ltd’s behalf. It was agreed by the assessor that Brillant Ltd was no longer traceable as from 1 May 2007. On 1 June 2007, Mr Fu re-let the property to another tenant on the following terms: (i) Term of lease: two years from 1 June 2007. (ii) Monthly rent: $50,000 payable in advance. (iii) Rent deposit: $100,000. (iv) Initial premium: $210,000. (v) Rates: $9,000 per quarter (payable by landlord). (vi) Management fee: $5,000 per month (payable by landlord). Property B This is a residential property purchased in June 2007. It was let out on 1 July 2007 on the following terms: (i) Term of lease: four years from 1 July 2007. (ii) Yearly rent: for the first two years – $252,000 per annum payable in advance; and for the third and fourth years – $280,000 per annum payable in advance.
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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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ACCT3161ass1_1011_1st-1 - THE CHINESE UNIVERSITY OF HONG...

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