Identify the amount for taxable profit for the year ended 31 May 19.2.
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Ltd buys a machine on 1 June 19.1 the cost price of which is R1 000 000. A Ltd provides for
Identify the amount for taxable profit for the year ended 31 May 19.2.
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- ASSIGNMENT On 1 January, 2010, Ahafoman Contractors (AC) bought an Heavy Duty Crane machine from Tractor and Equipment Company (TEC) on Hire Purchase. The terms of the agreement were that an initial deposit of GHS200,000 was payable followed by three installments of GHS189,890 on 31 December in each of the years from 2010 onwards.. TEC sells the machine for cash at GHS600,000. AC depreciates cranes at the rate of 25% on cost (assuming a nil residual value) The accounting years for both TEC and AC end on 31 December. Required a) Calculate the hire purchase interest included in the hire purchase price. b) Apportion the Hire Purchase Interest over the relevant years using the Sum of the digits method c) Writ e up TEC Account (as it will appear in the books of AC) d) Show the relevant extracts from AC's Income Statement and statement of financial position in respect of the hire purchase agreement for the relevant years.Consider two hypothetical companies: A and B. At the beginning of year 1, each company buys anidentical piece of equipment for £2,100. The two companies have the same assumptions about theequipment useful life, estimated residual value, and productive capacity. The annual production ofeach company is the same. However, each company uses a different method of depreciation. Asdisclosed in each company’s notes to the financial statements, each company’s depreciation method,assumptions, and production are as follows:Estimated residual value: £100Estimated useful life: 5 yearsDepreciation methods:Company A: straight-line methodCompany B: accelerated method (assume that 50% of the depreciable amount is depreciated in year1, and the remaining balance is depreciated equally during the subsequent years) a) Calculate, for each company, the beginning and ending net book value, the annual depreciationexpense, and accumulated year-end depreciation for the equipment throughout its useful lifeOn January 1, 2014, Mr. Albuera invested P2,000,000 in the six-year time deposit of Sulu Unibank which pays 10% annual interest. Assume Mr. Albuera pre-terminated the time deposit on July 1, 2018. Compute the final tax to be withheld on pre-termination. P5,000 P12,000 P45,000 P108,000
- 1. On January 1, 20X0 ABC Ltd. owed the government GST of $320. During 20X1, the company was subject to a GST rate of 7% and had sales before considering GST of $320,000. The company can deduct any GST it pays on taxable purchases at 7%. These purchases in 20X1 were $200,000 before considering GST. At the end of 20X0, the company had owed the government GST of $420. What is the net GST amount that the company paid to the government in 20X1? 2. XYZ Ltd., which uses IFRS, operates a coffee shop and began a promotion to increase the sales of its dark roast coffee in December 20X0. Every time that a customer buys a cup of this type of coffee for $4.00 each in December, the customer gets a coupon for 1 free mini cookie that usually sells for $.40 each and costs the company $.20 to produce. Customers cannot use or redeem the coupons until January 20X1. In December 20X1, the company sold 4,800 cups of dark roast coffee. Management expects customers will redeem 75% of the coupons based on many…On July 1, An entity purchased a machine worth 21,000, 000 subject to a 2% cash discount if paid within 120 days. Freight on the machinery amounted to P315,000. Construction of bases for such machine acquired amounted to P4,050,000. On November 15, the entity paid the supplier of the machine. How much is the total cost of the machine to be reported in the year-end statement of financial position ?On 1 January 2021 Linguine plc acquires a new machine under a leasing arrangement.The terms are:An Initial payment of £13,760, payable immediately on 1 January 2021 4 further annual payments of £20,000, starting 1 January 2022 The interest rate charged by the lessor is 8% The asset has a life of 5 years Calculate the following balances to present in Linguine's financial statements for theyear ended 31 December 2021(i) The carrying amount of the right of use asset(ii) Current lease liability(iii0 Non-current lease liability
- 15. On January 1, 200A, ABC rendered services to XYZ at a price of P450,000. ABC received P500,000 5-year promissory note from XYZ to be paid in full on December 200E. Assume the use of straight line method to amortized any premium or discount on note receivable, the total amount of income ABC realized from this transaction for 200A would beSalman and Adnan Corporation purchased typesetting equipment having a list price of Rs. 306,000 from a manufacturing in the Z area. Credit terms for the transaction were 2/10, n/30. Salman and Adnan Corporation paid the invoice within the discount period, as well as an additional 7% sales tax on the net price. Other payments relating to the acquisition of the equipment were a freight bill of Rs. 3,894 and a labor cost for installing the equipment of Rs. 6,315. During the installation process, an accident caused damage to the equipment, which was repaired at cost of Rs. 7,500. As soon as the equipment was in place, the company obtained insurance on it for a premium of Rs. 2,700. Required: Compute the Cost of Equipment. Calculate the depreciation for first three years using declining method at twice the normal rate, assume that the machine has 6 years useful life and have an estimated value of Rs. 38,000. At the time of disposal (after 6 years) cash Rs. 45,000 were received from Ahmed…Aa.38.
- What amount should be reported as royalty revenue for 2021?Consider two hypothetical companies: A and B. At the beginning of year 1, each company buys anidentical piece of equipment for £2,100. The two companies have the same assumptions about theequipment useful life, estimated residual value, and productive capacity. The annual production ofeach company is the same. However, each company uses a different method of depreciation. Asdisclosed in each company’s notes to the financial statements, each company’s depreciation method,assumptions, and production are as follows:Estimated residual value: £100Estimated useful life: 5 yearsDepreciation methods:Company A: straight-line methodCompany B: accelerated method (assume that 50% of the depreciable amount is depreciated in year1, and the remaining balance is depreciated equally during the subsequent years) Critically discuss the differences in the timing of the recognition of the depreciation expense foreach method. Under what circumstances do you think a manager could choose to use the…Blue Co. purchased a patent from the inventor for $36,000 on March 1, 20X6. Blue Co.’s fiscal year-end is December 31 each year. On the March 1, 20X6 purchase date, the remaining legal life of the patent was 6 years based on the original legal life of 20 years less 14 years since the patent was registered. Also on the March 1, 20X6 purchase date, the estimated remaining useful life of the patent for Blue Co.’s purposes is 3 years. Blue Co. amortizes patent costs in the year of acquisition for the portion of the year the patent was held. What is the patent’s book or carrying value as of December 31, 20X7? a. $14,000 b. $12,000 c. $22,000 d. $10,000
