The audited accounts of Lindsay Co. for year-end August 31, 2014 show a profit of $3,115,000 after charging the following: Depreciation 430,000 Rent 175,000 Legal fees 1,350,000 Audit fees 88,000 Donations 119,000 Bad debts 242,000 Foreign Travel 395,750 Interest payments 62,375 Other Information: Legal fees are as follows: Expenses in respect of recovery of debts, $585,000 Expenses related to the increase private share capital, $765,000 Lindsay Co. donated $65,500 to UTECH University and $53,500 to HELP, a private charity registered under the Charities Act. Bad debts are as follows: A loan of $76,130 to Derek Stan who failed to repayit. $63,017, owed by Simplicity Ltd. which was declared bankrupt. The balance is a percentage of receivables at year end which is deemed to be bad. Foreign travel expense included $268,210 for a vacation package for the marketing manager’s and his family plane tickets. The remaining amount was for a business trip to meet with potential suppliers. Included in revenue is the item – Refunds from Income Tax of $88,900 The capital allowances have been calculated at $1,260,500 Required: Calculate the Corporation Tax Liability of Lindsay Co. for Year of Assessment: 2014 Present notes where applicable..
The audited accounts of Lindsay Co. for year-end August 31, 2014 show a profit of $3,115,000 after charging the following: Depreciation 430,000 Rent 175,000 Legal fees 1,350,000 Audit fees 88,000 Donations 119,000 Bad debts 242,000 Foreign Travel 395,750 Interest payments 62,375 Other Information: Legal fees are as follows: Expenses in respect of recovery of debts, $585,000 Expenses related to the increase private share capital, $765,000 Lindsay Co. donated $65,500 to UTECH University and $53,500 to HELP, a private charity registered under the Charities Act. Bad debts are as follows: A loan of $76,130 to Derek Stan who failed to repayit. $63,017, owed by Simplicity Ltd. which was declared bankrupt. The balance is a percentage of receivables at year end which is deemed to be bad. Foreign travel expense included $268,210 for a vacation package for the marketing manager’s and his family plane tickets. The remaining amount was for a business trip to meet with potential suppliers. Included in revenue is the item – Refunds from Income Tax of $88,900 The capital allowances have been calculated at $1,260,500 Required: Calculate the Corporation Tax Liability of Lindsay Co. for Year of Assessment: 2014 Present notes where applicable..
Chapter6: Business Expenses
Section: Chapter Questions
Problem 43P
Related questions
Question
The audited accounts of Lindsay Co. for year-end August 31, 2014 show a profit of
$3,115,000 after charging the following:
Depreciation 430,000
Rent 175,000
Legal fees 1,350,000
Audit fees 88,000
Donations 119,000
Bad debts 242,000
Foreign Travel 395,750
Interest payments 62,375
Other Information:
- Legal fees are as follows:
Expenses in respect of recovery of debts, $585,000
Expenses related to the increase private share capital, $765,000
- Lindsay Co. donated $65,500 to UTECH University and $53,500 to HELP, a
private charity registered under the Charities Act.
- Bad debts are as follows:
- A loan of $76,130 to Derek Stan who failed to repayit.
- $63,017, owed by Simplicity Ltd. which was declared bankrupt.
- The balance is a percentage of receivables at year end which is deemed to be
bad.
- Foreign travel expense included $268,210 for a vacation package for the
marketing manager’s and his family plane tickets. The remaining amount was for
a business trip to meet with potential suppliers.
- Included in revenue is the item – Refunds from Income Tax of $88,900
- The capital allowances have been calculated at $1,260,500
Required:
- Calculate the Corporation Tax Liability of Lindsay Co. for Year of Assessment: 2014
- Present notes where applicable..
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