ACCT3161ass4_1011_1stAnswer

ACCT3161ass4_1011_1stAnswer - THE CHINESE UNIVERSITY OF...

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THE CHINESE UNIVERSITY OF HONG KONG School of Accountancy ACCT 3161 – Taxation (1 st Term, 2010-2011) Assignment 4 Solution Question 1 (a) Modern Concept Ltd Computation of assessable profits for the year of assessment 2007/08 (Basis period: year ended 31 March 2008) $ $ Profit per accounts 5,113,000 Add: Bad debt written off 180,000 Commission paid to undisclosed recipients 100,000 Contribution to recognised retirement scheme General manager [$40,000 – ($200,000 x 15%)] 10,000 Charitable donations 689,000 Legal fees – formation of a subsidiary company 20,000 – loan recovery 25,000 1,024,000 6,137,000 Less: Dividends 800,000 Interest income ($89,000 + $101,000) 190,000 Rental income 250,000 Special contribution to recognised retirement scheme ($300,000 x 1/5) 60,000 Depreciation allowances 340,000 (1,640,000 ) 4,497,000 Less: Charitable donations (cash amounts only) (389,000 ) Assessable profits 4,108,000 Profits tax at 17·5% 718,900 Less: Tax waiver (25,000 ) Profits tax payable 693,900 (b) (i) Location of the property. (ii) Location of the property. (iii) Location of the stock exchange where the shares are traded. (iv) Place where the contracts of purchase and sale are effected. (v) Place where the services are performed. Data file: ch/ ACCT3161ass4_1011_1stAnswer Page 1
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Question 2 (a) Fat Tat Trading Co Ltd – Profits tax computation 2007/08 $ $ Profit per account 1,045,755 Add: Property tax 5,000 Increase in general provision for bad debts 9,000 Special contribution to a recognised occupational retirement scheme ($100,000 x 4/5) 80,000 Depreciation per accounts 66,000 Premium ($150,000 x 1/3) 50,000 Charitable donations 75,000 Loss on the sale of assets 3,500 Share of the partnership loss 45,000 333,500 1,379,255 Less: Dividend 350,000 Interest ($35,000 + 25,000) 60,000 Certificates of deposit 15,000 Depreciation allowances 97,215 (522,215 ) Adjusted profits 857,040 Less: Charitable donations (75,000 ) Assessable profits for normal trading receipts 782,040 Less: Partnership loss (45,000 ) Net assessable profits for normal trading receipts
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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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ACCT3161ass4_1011_1stAnswer - THE CHINESE UNIVERSITY OF...

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