- $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

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter20: Corporations And Parterships

Section: Chapter Questions

Problem 31CE

See similar textbooks

Similar questions

Dick Tracy Corporation paid the following expenses during the year: Interest for late payment (delinquent) income tax P5,000 Surcharge and compromise for late payment of income tax 30,000 Interest on bonds issued 40,000 Interest on money borrowed by the Company from a stockholder who owns 80% of the outstanding stock of the company 20,000 What is Dick Tracy Corporation’s deductible expense? a. P45,000 b. P75,000 c. P95,000 d. P60,000
ABC Corporation provided the following condensed operating report. Sales 2,000,000 Less: Cost of sales 1,200,000 Gross Profit 800,000 Less: Operating Expenses 250,000 Operating Income 550,000 Non-cash expenses included in the above numbers total 500,000. ABC incurred an average of 8% effective interest on its long-term debt amounting to 1,500,000. It is taxed at 35%. Based on the above information, its current free cash flows to the firm is?
A company generates $500,000 of gross income during its tax year and incurs operating expenses of $25,000. Property taxes on business assets amount to $20,000. The total depreciation deductions for the tax year equal $80,000. What is the taxable income of this firm? a. $500,000 O b. $80,000 O. $124,000 O d. $375,000 If P= $1,000 and A = $188, and i% = 12% per year, then N=?? O a. 9 years O b. 8 years Ос 7years O d. 14 years
year before bonus and tax is P5,250,000. The income tax rate a bonus of 5% of the entity's earnings. The income for the Nature Company has an agreement to pay the sales manager Problem 1-29 (ACP) Nature Company has an agreement to pay the sales mana a bonus of 5% of the entity's earnings. The income for year before bonus and tax is P5,250,000. The income tax p is 30% of income after bonus. Required: Determine the bonus under each of the followin independent assumptions: 1 Bonus is a certain percent of the income before bonn and before tax. * f income after bonus h before tax. 3. Bonus is a certain percent of income after bonus and after 2. Bonus 1s a certain percent o tax. 4. Bonus is certain percent elincome.after tax but before bonus
RM1. NOTE: Please note that this questions was solved previously wrong . The operations of Ballons Ltd. Generated the following data for its currant December 31 taxation year. Business losses (150,000) Dividends received and deducted (Division C) 25,000 Bond Interest 12,500 Allowable business investment loss (7,500) Taxable capital gains 37,500 Allowable capital losses (17,500) (100,000) In the prior taxation year (last year), its first profitable year in several, Ballons Ltd. Had taxable income of $100,000. REQUIRED: Compute the non-capital loss for Balloons Ltd. In the current year and determine the amount of that loss that can be carried back to the prior year.
Gerogi Company had the following balances for income from continuing operations and pretax gains and losses on December 31: Income from continuing operations $228,000. Loss on discontinued operations ($75,000). Unrealized gain on available for sale debt security $ 29,000. Loss on impairment of Goodwill ($140, 000). Foreign currency translation loss ($ 67,000). The company's effective tax rate is 40 %. What amount should Gerogi Company report as comprehensive income for the year ended December 31?
Information relating to Waukegan Company for the current year is as follows: Income from continuing operations before tax $ 140,000 Income from discontinued operations (pretax) 40,000 What is the amount of the income tax expense that should be allocated to the income from discontinued operations? (Assume the effective tax rate is 25%) income tax expense
Westwind Corporation reports the following results for the current year: Gross profit on sales $250,000 Long-term capital gain 25,000 Long-term capital loss 10,000 Short-term capital gain 7,500 Short-term capital loss 12,500 Operating expenses 80,000 What are Westwind's taxable income and regular tax liability before credits for the current year?
General's Inc. has the following financial items for the current year: Advertising Expenses $70,000 Cost of Goods Sold $710,000 Other Operating Expenses $535,000 Sales $1,665,000 Wages and Salaries $570,000 Capital Loss $45,000 Calculate General's taxable income for the current year. A В C D E 1 2 Taxable Income (Net Operating Loss)= 3 4 6 7 8 10
The following information is available for Hunt Company after its first year of operations: Income before taxes $250,000 Federal income tax payable $104,000 Deferred income tax (4,000) Income tax expense 100,000 Net income $150,000 Hunt estimates its annual warranty expense as a percentage of sales. The amount charged to warranty expense on its books was £95,000. Assuming a 40% income tax rate, what amount was actually paid this year for warranty claims?
In its first year of operations corporation Lauzer has the following results for the year: Gross income from operations $700,000 operating deductible expenses (200,000) short term capital gains 5,000 short term capital losses (14,000) long term capital gains 8,000 long term capital losses 3,000 What is the corporation's taxable income for the year?
9. Alpaca Corporation had revenues of $285,000 in its first year of operations. The company has not collected on $19,600 of its sales and still owes $27,700 on $99,500 of merchandise it purchased. The company had no inventory on hand at the end of the year. The company paid $13,400 in salaries. Owners invested $17,500 in the business and $17,500 was borrowed on a five-year note. The company paid $4,400 in interest that was the amount owed for the year, and paid $8,400 for a two-year insurance policy on the first day of business. Alpaca has an effective income tax rate of 40%. (Assume taxes are paid in the same year). Compute the cash balance at the end of the first year for Alpaca Corporation. Multiple Choice $175,415 $164,415 $196,415 $137,000