- $15,000 000 in respect of recovery of commercial debts for One-Third Tax Co. The companywas 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 sonThe capital allowances have been calculated at $130,55010. There was an increase in wages of $1,000,000 which qualifies for Employment Tax Credit (all9.Full Tax Co. is incorporated and tax resident in Barbados. The audited financial statements for Full TaxCo. for year-end December 31, 2021, show an accounting profit after tax of $5,500,000 after chargingother conditions to qualify for this credit was met).11. The tax rates for general business in Barbados applies.the12. Assume capital allowance rate of 5 % p.a for building/ leasehold improvements.following:13. All amounts are in Barbadian currency.14. As at the 31 December 2020, the company has prior years tax losses as follows:• Depreciation $1,500,0002013 - $30,0002015 - $50,0002020 - $40,000• Tax $500,000• Property Tax $900,000• Interest expense $15,000Required• Preference dividends of $40,000A. Explain the difference between tax reliefs and tax creditsB. Calculate the Corporation Tax Liability of Full Tax Co. for Y/A: 2021. Using the Barbados• Legal fees $1,110,000Income Tax Act or any other relevant document explain the treatment of the items includedor omitted from the income tax computation.• 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 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 $100,0005. Repairs and Maintenance include for $500,000 removing the office ceramic floor titles andreplacing it with wooden flooring.Included in the company's total assessable income is exempt income of $50,000. $16,5006.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.

(a) In this question,I have explained the difference between tax credit and tax relief

Answered: tequired A. Explain the difference…

Business

Accounting

tequired A. Explain the difference between tax reliefs and tax credits

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Explain the difference between marginal tax rates and average taxrates.

A: Marginal tax rate : The marginal tax rate is the system by which the federal taxation system makes…

Q: Explain how a change in tax rates affects the measurement of deferred tax amounts.

A: Deferred Tax Asset Items on a company's balance sheet that may be used to reduce taxable income in…

Q: Define Effective tax rate.

A: Tax: Tax refers to a compulsory payment or a contribution to the state revenue, levied by the…

Q: Sub- Account's Give on example of Direct Tax with explanation?

A: A direct tax is one that falls under the same classification for both its impact and its incidence.…

Q: Explain the folllowing a- what is Income Taxa compliance b- Are Tax rates influence Income Tax…

A: Income tax compliance refers to the act of following all applicable tax laws and regulations related…

Q: Distinguish between Direct and Indirect taxes giving the various examples where necessary.

A: Taxes are the compulsory obligations to be paid by the individuals to government. It can be levied…

Q: Differentiate the accounting measurement of current tax liability and current tax asset from…

A: Tax is the charges levied by the central and state government on the net income, sale or capital…

Q: Answer in points: Question. Difference between average and marginal tax rates

A: Average rate of tax is the amount of taxes paid on total income on average. For example, a business…

Q: An example of an expense classifi cation by function is: A . tax expense.

A: Expenses in the Income Statement are classified into two types: Expense by nature Expense by…

Q: Explain the differences between a tax credit and a tax deduction. Which is better? List three…

A: Tax credit and tax deductions are often considered same but they are not interchangeable even though…

Q: Access the glossary (“Master Glossary”) to answer the following. a. What is a deferred tax asset?…

Q: Explain why someone might owe a tax balance

A: The objective of this question is to understand the reasons why an individual might owe a tax…

Q: Explain various types of taxes

A: taxes A tax may be a obligatory fee or monetary charge levied by any government on a private or a…

Q: What is meant by “tax allocation within a period”? What is the justification for such practice?

A: Tax: Tax refers to a compulsory payment or a contribution to the state revenue, levied by the…

Q: explain what constitute the variables of tax planning

A: There are mainly four variables upon which tax consequence of all the transactions depended: These…

Q: what are the characteristics of a good tax system?

A: Tax system is designed by the government of every country which is imposed on the individual’s…

Q: The unified tax credit can be applied against the:

A: The objective of the question is to understand against what the unified tax credit can be applied.

Q: What are the principles of a sound tax system? Briefly explain each

A: Introduction:- The tax system is described as a legally controlled system of public relations based…

Q: Distinguish the difference between Tax Structure and Tax Rates

A: Meaning of Tax Tax is a source of revenue to the Government. Different types of taxes are paid by…

Q: A tax structured so that people with the different incomes pay the same percentage of their income…

A: A tax structured so that people with the different incomes pay the same percentage of their income…

Q: Real property tax is an example of: Group of answer choices Property tax Excise tax Privilege tax…

A: Real property tax is the tax on real property like land and buildings, improvements, machinery, etc.…

Q: Who is responsible for substantiating income tax deductions and how are income tax deductions…

A: Introduction: Income is the money that a person or organization receives after investing capital,…

Q: Why is income the basis for tax? Explain concisely in 3-5 sentences.

A: Basis means anything that the govt uses to compute the tax.

Q: What are the advantages of an indirect tax such as the VAT compared with an income tax?

A: The objective of this question is to understand the advantages of an indirect tax, specifically…

Q: In computing the deferred tax asset or liability, w. tax rate is used? a. Current tax rate b.…

A: Deferred tax asset or liability arises due to temporary differences

Q: Explain the difference between direct and indirect tax

A: Introduction: Tax refers to an individual's simple duty to contribute their resources. It is imposed…

Q: Explain the functioning of flat taxation. Which taxpayers are usually subject to a flat tax rate?

A: Flat taxation is a taxation system where all taxpayers are subject to the same tax rate, regardless…

Q: Explain the difference between tax reliefs and tax credits

A: Taxes are mandatory payments placed on individuals or businesses by a government agency, whether…

Q: The tax rate is the ratio between the amount of tax and the amount of income. true Error

A: >Tax rate is the rate of tax that is levied by the regulating authorities.>Income tax rate is…

Q: e from Tax Evasion?

A: The difference is given as,

Q: Explain the term tax & its objectives in detail

A: What is Tax ? Tax is A mandatory Payment to be made by the people including Corporate Entities to…

Q: the relevent IPSAS used in accounting for tax revenue with illustration.

A: These are accounting standards made particularly for the public sector.

Q: . As distinguished from deductions, tax credit is a. A deduction from gross sales/receipts b. A…

A: Tax deductions are the amount which can reduce from taxable income. After such deduction, remaining…

Q: Describe the Replacement Analysis with Tax Considerations?

A: Introduction: Capital budgeting is one of the important techniques used to determine the value that…

Q: What are the three different kinds of income tax systems? (Explain each)

A: Income tax is a direct tax which is levied on the income. Taxes are the fees which are charged by…

Q: Discuss to what extent deferred tax accounting can be used for income smoothing.

A: Deferred tax is referred as an income taxes for the tax on the losses or profits of the company…

Q: iscuss different principles of Tax

A: Tax: Tax occurs once a government or different authority needs that a fee be paid by citizens and…

Q: 1. Name three types of tax rate structure and give examples.

A: Hi student Since there are multiple questions, we will answer only first question.

Q: Discuss the differences of tax planning and tax management.

A: Tax planning is the process or technique which is used in reduction of tax liability of the business…

Q: Q2: What is tax accounting? Explain with the help of permanent tax difference.

A: Tax accounting: It is an accounting method that focus on taxes rather than presenting financial…

Question

- $15,000 000 in respect of recovery of commercial debts for One-Third Tax Co. The company
was not reimbursed this amount
-$50,000 relating to the purchase of new subsidiary
- $400,000 to increase the share capital of the company
8. General expenses include $72,000 for the school fees of the director's son
The capital allowances have been calculated at $130,550
10. There was an increase in wages of $1,000,000 which qualifies for Employment Tax Credit (all
9.
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
other conditions to qualify for this credit was met).
11. The tax rates for general business in Barbados applies.
the
12. Assume capital allowance rate of 5 % p.a for building/ leasehold improvements.
following:
13. All amounts are in Barbadian currency.
14. As at the 31 December 2020, the company has prior years tax losses as follows:
• Depreciation $1,500,000
2013 - $30,000
2015 - $50,000
2020 - $40,000
• Tax $500,000
• Property Tax $900,000
• Interest expense $15,000
Required
• Preference dividends of $40,000
A. Explain the difference between tax reliefs and tax credits
B. Calculate the Corporation Tax Liability of Full Tax Co. for Y/A: 2021. Using the Barbados
• Legal fees $1,110,000
Income Tax Act or any other relevant document explain the treatment of the items included
or omitted from the income tax computation.
• 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 floor titles and
replacing it with wooden flooring.
Included in the company's total assessable income is exempt income of $50,000. $16,500
6.
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 was
reimbursed this amount.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Part 4BDiscuss the attributes of a good tax system
Why is the income tax payable not the same as income tax expense?
Can you explain the difference between a deferred tax asset, a tax receivable, and a prepaid tax account?
Discuss how tax residence and non-residence are generally charged to tax
What is an excise tax and its examples?
What are taxes ? Explain types of Taxes Both Direct and Direct. Plagarism free answer required.
What is the burden of the tax? Explain the key factors that determine the incidence of the tax.
Briefly explain the precise difference between a refundable vs. a nonrefundable tax credit. Provide one or two examples of each category.
Define each of the following terms:a. Interest tax shields; value of tax shield
breifly explain the difference between PAYE and social responsibility tax.