9. Profits 3

9. Profits 3 - BUSI 0018 Hong Kong Taxation Tutorial...

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TQ_U9_Profits_3 1 BUSI 0018 – Hong Kong Taxation Tutorial Questions Unit 9 – Profits Tax (3) Question 21 Mr. Lee has been carrying on a business in Hong Kong as a distributor of micro- computers for many years. His operating results for the year ended 31 December 2009 were as follows: $ $ Gross Profit 2,600,000 Interest received (Note 1) 80,000 Commission received (Note 2) 55,000 Profit on disposal of fixed asset 15,000 Sundry income (Note 3) 25,000 2,775,000 Less: Expenses Salaries and bonuses to staff 550,000 Rent and rates 350,000 Telephone, telex and postage 21,000 Entertainment and travelling (Note 4) 100,000 Legal and professional fee (Note 5) 65,000 Interest expenses (Note 6) 105,000 Repairs and maintenance (Note 7) 162,000 Insurance (Note 8) (23,000) Salaries to proprietor 162,000 Provision for bad debts (Note 9) 30,000 Depreciation for fixed assets 85,000 Donations (Note 10) 6,000 Miscellaneous expenses (Note 11) 8,000 1,621,000 Net profit 1,154,000 Additional information: (1) Interest received from (i) US$ deposits placed with a bank in Singapore $40,000 (ii) Euro$ fixed deposits with a local bank 16,000 (iii) Debentures registered in US 8,000 (iv) HK$ deposits placed with a local bank (deposits were used to secure for bank borrowings and interest expenses on the borrowings are deductible – see note 6) 16,000 $80,000
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TQ_U9_Profits_3 2 (2) Commission received from a company in Malaysia for the sale of certain products. Sale contracts were negotiated and concluded by Mr. Lee’s staff in Malaysia.
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This note was uploaded on 02/23/2012 for the course BUSI 0018 taught by Professor C.ng during the Spring '11 term at HKU.

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9. Profits 3 - BUSI 0018 Hong Kong Taxation Tutorial...

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