Answered: .Prepare the income tax computation for…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mr. Richard Allen, the director of a hotel in Jamaica, has requested that your firm assist with the preparation of his 2020 income tax computation. He provided you with the following information:

a) Gross salary $7,000,000 per year.

b) He was provided with a company car on 1 January 2019. Cost $3,000,000.

c) As part of his compensation, he receives a meal allowance of $5,000 per week.

d) The company also pays his son school fees for $80,000 per term. (assume 3 terms)

e) Rest Well did not deduct any NIS, NHT, Education Tax or PAYE at source.

f) Income from the rental of his personal investment property was $500,000. Expenses was $450,000. Capital allowance for this property was $80,000.

Required

i.Prepare the income tax computation for Richard Allen. Advise him of his statutory obligations (NIS, NHT, Education Tax & PAYE).

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