MHD LLC a trading company dealing in fast moving consumer goods. Their trading results for the year ending 31st Dec, 2018 shows profit of RO45750. The following additional information is also given: The company owned a building cost RO90000. Company charged depreciation on building at 9% per annum while in Oman tax law it is prescribed @ 4%. Company purchased a land for business purposes costing RO30000. The accountant charged depreciation on land at 10% per annum. The company made a donation on the occasion of Ramadan festival worth RO4500 which was charged on the income statement. The gross income of the company amounts to RO52650 before correcting the inventory valuation. The ledger book overvalued the opening inventory by RO1350 and undervalued closing inventory by RO1250 Company purchased computers to make all billing and administrative work computerized for RO3000 and accountant has expensed this cost. Company also offering credit sales to its customers. One of the customers could not pay debts of RO850 during the concerned financial year. The accountant omitted to record this transaction. The owner had a leisure trip of Australia and charged all expenses worth RO2500 out of the profit of business. The company paid the salary to its employee for 11 months. One-month salary is outstanding and accountant only recorded 11 months’ salary equal to RO7700 in accounts books. Bad debts RO1225 of 2018 recovered in the current year 2019. Such bad debts earlier allowed as deductible expenses. Now accountant included such bad debts in this year of profit. During the year company received RO5800 as dividend income from Galfar engineering company which is including in net profit. The company has incurred a loss of RO1700 and RO2200 in the years 2010 and 2012. These losses are not yet carried forward and set-off. Requirement: Calculate Income chargeable to tax. (b) Calculate the tax liability of the company
MHD LLC a trading company dealing in fast moving consumer goods. Their trading results for the year ending 31st Dec, 2018 shows profit of RO45750.
The following additional information is also given:
The company owned a building cost RO90000. Company charged
Company purchased a land for business purposes costing RO30000. The accountant charged depreciation on land at 10% per annum.
The company made a donation on the occasion of Ramadan festival worth RO4500 which was charged on the income statement. The gross income of the company amounts to RO52650 before correcting the
The ledger book overvalued the opening inventory by RO1350 and undervalued closing inventory by RO1250
Company purchased computers to make all billing and administrative work computerized for RO3000 and accountant has expensed this cost.
Company also offering credit sales to its customers. One of the customers could not pay debts of RO850 during the concerned financial year. The accountant omitted to record this transaction.
The owner had a leisure trip of Australia and charged all expenses worth RO2500 out of the profit of business.
The company paid the salary to its employee for 11 months. One-month salary is outstanding and accountant only recorded 11 months’ salary equal to RO7700 in accounts books.
During the year company received RO5800 as dividend income from Galfar engineering company which is including in net profit.
The company has incurred a loss of RO1700 and RO2200 in the years 2010 and 2012. These losses are not yet carried forward and set-off.
Requirement:
Calculate Income chargeable to tax. (b) Calculate the tax liability of the company
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