This is about tax in the Caribbean can you help please.iii. Calculate the Corporation Tax Liability of Full Co. for Y/A: 20212. Using the Barbados Income Tax Act or any other relevant document explain the treatment of theitems included or omitted from the income tax computation. Part AFull Tax Co. is incorporated and tax resident in Barbados. The audited financial statements forFull TaxCo. for year-end December 31, 2022, show an accounting profit after tax of $5,500,000 aftercharging thefollowing:• Depreciation $1,500,000• Tax for the year $500,000• Property Tax $900,000• Interest expense $15,000• Preference dividends of $40,000• Legal fees $1,110,000• Insurance of $750,000• Bad debts $40,000• Foreign Travel $20,000• Repairs and Maintenance $1,500,000• General expenses $600,000Other Information1. Property Tax of $600,000 was paid for the property on which the company's factory islocated; $300,000 for the office premises and $100,000 for the director's home.2. The insurance was paid for the factory and office premises.3. The bad debt expense includes a general provision of $10,000 and a specific provision of$30,000.4. The company paid interim ordinarily dividends totaling $100,000.5. Repairs and Maintenance include for $500,000 removing the office ceramic floor titlesand replacing it with wooden flooring.6. Included in the company's total assessable income is exempt income of $50,000.$16,500 relates to expenses incurred in earning this exempt income.7. Legal fees include:- $40,0000 in respect of recovery of commercial debts for Full Tax Co.- $10,000 in respect of recovery of commercial debts for Half Tax Co. The company wasreimbursed this amount. - $15,000 in respect of recovery of commercial debts for One-Third Tax Co. Thecompany was not reimbursed this amount.- $50,000 relating to the purchase of new subsidiary- $400,000 to increase the share capital of the company8. General expenses include $72,000 for the school fees of the director's son.9. The capital allowances have been calculated at $130,550. Based on the items includedin the fixed asset schedule.10. There was an increase in wages of $1,000,000 which qualifies for Employment TaxCredit (all other conditions to qualify for this credit was met).11. The tax rates for general Barbados is as follows:Corporate income tax (CIT) ratesThe following rates apply to taxes on corporate income:Taxable income bracket/ EntityTaxable income up to 1 million Barbados dollars (BBD)Taxable income exceeding BBD 1 million but not exceeding BBD 20 millionTaxable income exceeding BBD 20 million but not exceeding BBD 30 millionTaxable income exceeding BBD 30 million2013 $300,0002015 $5,000,000CIT rate (%)Requiredi.5.5-3.012. Assume capital allowance rate of 5 % p. A for building/ leasehold improvements.13. All amounts are in Barbadian currency.14. As at the 31 December 2020, the company has prior year's tax losses as follows:2.51.02020 $4,000,000Tax losses can be carried forward for a maximum of 7 years and is restricted to 50% ofthe tax income in the current year.Explain the difference between tax reliefs and tax credits. Giving at two examples foreach that maybe found in Jamaica, Trinidad and Tobago or Barbadosii. How would you classify the tax system in Barbados.? State your reasoniii. Calculate the Corporation Tax Liability of Full Tax Co. for Y/A: 20212. Using theBarbados Income Tax Act or any other relevant document explain the treatment of theitems included or omitted from the income tax computation.iv. Explain two reasons why expenses may not be deductible for income tax/corporation taxpurposes.v. Identify two (2) documents that must accompany the Corporation Tax return when it isfiled.

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SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 47P

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Full Tax Co. is incorporated and tax resident in Barbados. The audited financial statements for Full Tax Co. for year-end December 31, 2022, show an accounting profit after tax of $5,500,000 after charging the following: • Depreciation $1,500,000` • Tax for the year $500,000 • Property Tax $1,000,000 • Interest expense $15,000 • Preference dividends of $40,000 • Legal fees $1,110,000 • Insurance of $750,000 • Bad debts $40,000 • Foreign Travel $20,000 • Repairs and Maintenance $1,500,000 • General expenses $600,000 Other Information 1. Property Tax of $600,000 was paid for the property on which the company’s factory is located; $300,000 for the office premises and $100,000 for the director’s home. 2. The insurance was paid for the factory and office premises. 3. The bad debt expense includes a general provision of $10,000 and a specific provision of $30,000. 4. The company paid interim ordinarily dividends totaling $100,000. 5. Repairs and Maintenance include for $500,000 removing the…
Full Tax Co. is incorporated and tax resident in Barbados. The audited financial statements for Full Tax Co. for year-end December 31, 2022, show an accounting profit after tax of $5,500,000 after charging the following: • Depreciation $1,500,000 •Tax for the year $500,000 • Property Tax $900,000 • Interest expense $15,000 • Preference dividends of $40,000 • Legal fees $1,110,000 • Insurance of $750,000 • Bad debts $40,000 • Foreign Travel $20,000 • Repairs and Maintenance $1,500,000 • General expenses $600,000 Other Information 1. Property Tax of $600,000 was paid for the property on which the company's factory is located; $300,000 for the office premises and $100,000 for the director's home. 2. The insurance was paid for the factory and office premises. 3. The bad debt expense includes a general provision of $10,000 and a specific provision of $30,000. 4. The company paid interim ordinarily dividends totaling $100,000. 5. Repairs and Maintenance include for $500,000 removing the…
FULL TAX COFull Tax Co. is incorporated and tax resident in Barbados. The audited financial statements for Full TaxCo. for year-end December 31, 2020 show an accounting profit after tax of $13,500 after charging thefollowing:• Depreciation $5,300• Tax $1,500• Property Tax $10,000• Interest expense $15,000• Preference dividends of $40,000• Legal fees $110,000• Insurance of $75,000• Bad debts $4,000• Foreign Travel $1,500• Repairs and Maintenance $50,000• General expenses $60,000Other Information1. Property Tax of $6,000 was paid for the property on which the company’s factory is located;$3,000 for the office premises and $1,000 for the director’s home2. The insurance was paid for the factory and office premises.3. The interest of $5,000 was payable at the company’s financial year end.4. The bad debt expense is a percentage of debtors at year-end5. The company paid interim ordinarily dividends totaling $10,0006. Repairs and miniatous include motor vehicle repairs of $30,000 and redoing…
Full Tax Co. is incorporated and tax resident in Barbados. The audited financial statements for Full Tax Co. for year-end December 31, 2022, show an accounting profit after tax of $5,500,000 after charging the following: Depreciation $1,500,000 Tax for the year $500,000 Property Tax $900,000 Interest Expense $15,000 Preference Dividends $40,000 Legal Fees $1,110,000 Insurance $750,000 Bad Debts $40,000 Foreign Travel $20,000 Repairs and Maintenance $1,500,000 General Expense $600,000 Other information 1. Property Tax of $600,000 was paid for the property on which the company’s factory is located; $300,000 for the office premises and $100,000 for the director’s home. 2. The insurance was paid for the factory and office premises. 3. The bad debt expense includes a general provision of $10,000 and a specific provision of $30,000. 4. The company paid interim ordinarily dividends totaling $100,000. 5. Repairs and Maintenance include for $500,000 removing the office ceramic floor…
Full Tax Co. is incorporated and tax resident in Barbados. The audited financial statements for Full Tax Co. for year-end December 31, 2021, show an accounting profit after tax of $5,500,000 after charging the following: • Depreciation $1,500,000 • Tax $500,000 • Property Tax $900,000 • Interest expense $15,000 • Preference dividends of $40,000 • Legal fees $1,110,000 • Insurance of $750,000 • Bad debts $40,000 • Foreign Travel $20,000 • Repairs and Maintenance $1,500,000 • General expenses $600,000 Other Information 1. Property Tax of $600,000 was paid for the property on which the company’s factory is located; $300,000 for the office premises and $100,000 for the director’s home. 2. The insurance was paid for the factory and office premises. 3. The bad debt expense includes a general provision of $10,000 and a specific provision of $30,000. 4. The company paid interim ordinarily dividends totaling $100,000 5. Repairs and Maintenance include for $500,000 removing the office ceramic…
Good afternoon Please help with question. Thanks in advance Full Tax Co. is incorporated and tax resident in Barbados. The audited financial statements for Full Tax Co. for year-end December 31, 2021, show an accounting profit after tax of $5,500,000 after charging the following: Depreciation $1,500,000 Tax $500,000 Property Tax $900,000 Interest expense $15,000 Preference dividends of $40,000 Legal fees $1,110,000 Insurance of $750,000 Bad debts $40,000 Foreign Travel $20,000 Repairs and Maintenance $1,500,000 General expenses $600,000 Other Information Property Tax of $500,000 was paid for the property on which the company’s factory is located; $300,000 for the office premises and $100,000 for the director’s home. The insurance was paid for the factory and office premises. The bad debt expense includes a general provision of $10,000 and a specific provision of $30,000. The company paid interim ordinarily dividends totaling $100,000 Repairs and Maintenance include for $500,000…
Crypto Corporation recognizes net income of $150,000 along with an other comprehensive gain of $32,400 (pre-tax) for the current year ended December 31. The prior year December 31 balance in accumulated other comprehensive income is $68,400 (credit balance), and the balance in retained earnings is $48,000 (credit balance). Assume a tax rate of 25%. a. Prepare a statement of comprehensive income for the current year, and what is the AOCI account balance.
The audited financial statements for New Life Manufacturing for year-end December 31, 2022,show an accounting profit after tax of $16,500,000 after charging the following:• Depreciation $2,500,000`• Tax for the year $500,000• Property Tax $1,000,000• Interest expense $15,000• Preference dividends of $40,000• Legal fees $1,110,000• Insurance of $750,000• Bad debts $40,000• Foreign Travel $20,000• Repairs and Maintenance $1,500,000• General expenses $600,000Other Information1. Property Tax of $600,000 was paid for the property on which the company’s factory islocated; $300,000 for the office premises and $100,000 for the CEO’s home.2. The insurance was paid for the factory and office premises.3. Loss on disposal of fixed assets $350,0004. Income Tax Refund of $700,000 was included as part of the entity’s income.5. The bad debt expense includes a general provision of $10,000 and a specific provision of$30,000.6. The company paid final ordinary dividends totaling $100,000.7. Repairs and…
The audited financial statements for New Life Manufacturing for year-end December 31, 2022,show an accounting profit after tax of $16,500,000 after charging the following:• Depreciation $2,500,000`• Tax for the year $500,000• Property Tax $1,000,000• Interest expense $15,000• Preference dividends of $40,000 • Legal fees $1,110,000• Insurance of $750,000• Bad debts $40,000• Foreign Travel $20,000• Repairs and Maintenance $1,500,000• General expenses $600,000 1.Property Tax of $600,000 was paid for the property on which the company’s factory is located; $300,000 for the office premises and $100,000 for the CEO’s home. 2. The insurance was paid for the factory and office premises. 3. Loss on disposal of fixed assets $350,0004. Income Tax Refund of $700,000 was included as part of the entity’s income.5. The bad debt expense includes a general provision of $10,000 and a specific provision of $30,000.6. The company paid final ordinary dividends totaling $100,000.7. Repairs and maintenance…
XYZ is a calendar-year corporation that began business on January 1, 2022. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. Use Exhibit 16-6. XYZ corporation Income statement For current year Book Income Revenue from sales $ 40,000,000 Cost of Goods Sold (27,000,000) Gross profit $ 13,000,000 Other income: Income from investment in corporate stock 300,0001 Interest income 20,0002 Capital gains (losses) (4,000) Gain or loss from disposition of fixed assets 3,0003 Miscellaneous income 50,000 Gross Income $ 13,369,000 Expenses: Compensation (7,500,000)4 Stock option compensation (200,000)5 Advertising (1,350,000) Repairs and Maintenance (75,000) Rent (22,000) Bad Debt expense (41,000)6 Depreciation (1,400,000)7 Warranty expenses (70,000)8 Charitable donations (500,000)9 Meals (all from restaurants) (18,000) Goodwill impairment…
You were asked by your audit client Panga Inc., to assist them in preparing its income tax return for the period ended December 31, 2021. You investigation revealed the following information: Pre-tax financial income P10,000,000 Estimated litigation loss recognized as a provision for the current year 600,000 Accrued rental income 1,200,000 Prepaid operating expenses 250,000 Unearned rental income 300,000 Dividend income from domestic corporation 500,000 Life insurance expense 300,000 Current income tax is 25% and is expected to remain in 2022 but will increase to 30% in 2023. Assuming all temporary differences will clear by 2022, what is the total tax expense for the year?
The audited financial statements for New Life Manufacturing for year-end December 31, 2022,show an accounting profit after tax of $16,500,000 after charging the following: • Depreciation $2,500,000• Tax for the year $500,000• Property Tax $1,000,000• Interest expense $15,000• Preference dividends of $40,000• Legal fees $1,110,000• Insurance of $750,000• Bad debts $40,000• Foreign Travel $20,000• Repairs and Maintenance $1,500,000• General expenses $600,000 Other Information1. Property Tax of $600,000 was paid for the property on which the company’s factory islocated; $300,000 for the office premises and $100,000 for the CEO’s home. 2. The insurance was paid for the factory and office premises. 3. Loss on disposal of fixed assets $350,000 4. Income Tax Refund of $700,000 was included as part of the entity’s income. 5. The bad debt expense includes a general provision of $10,000 and a specific provision of$30,000. 6. The company paid final ordinary dividends totaling $100,000. 7. Repairs…