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- Question 4: Timberlake Ltd, a partially exempt company for the purposes of value added tax (VAT), requires advice on simplifying the way in which it accounts for VAT. -Timberlake Ltd is partially exempt for the purposes of VAT. -Timberlake Ltd’s turnover for the year ended 31 March 2019 was £240,000 (VAT exclusive). -Timberlake Ltd’s turnover for the year as a whole for VAT purposes comprised 86% taxable supplies and 14% exempt supplies. -The input VAT suffered by Timberlake Ltd on expenditure during the year ended 31 March 2019 was: £ Wholly attributable to taxable supplies 7,920 Wholly attributable to exempt supplies 1,062 Unattributable 4,150 Timberlake Ltd expects its turnover and expenditure figures to increase by approximately 25% next year. The director of…Question 4: Timberlake Ltd, a partially exempt company for the purposes of value added tax (VAT), requires advice on simplifying the way in which it accounts for VAT. -Timberlake Ltd is partially exempt for the purposes of VAT. -Timberlake Ltd’s turnover for the year ended 31 March 2019 was £240,000 (VAT exclusive). -Timberlake Ltd’s turnover for the year as a whole for VAT purposes comprised 86% taxable supplies and 14% exempt supplies. -The input VAT suffered by Timberlake Ltd on expenditure during the year ended 31 March 2019 was: £ Wholly attributable to taxable supplies 7,920 Wholly attributable to exempt supplies 1,062 Unattributable 4,150 Timberlake Ltd expects its turnover and expenditure figures to increase by approximately 25% next year. The director of…Exercise 19-02 (Part Level Submission) The following information is available for Martinez Corporation for 2019 (its first year of operations). 1. Excess of tax depreciation over book depreciation, $40,400. This $40,400 difference will reverse equally over the years 2020–2023. 2. Deferral, for book purposes, of $19,900 of rent received in advance. The rent will be recognized in 2020. 3. Pretax financial income, $284,700. 4. Tax rate for all years, 20%.
- BLOCK D/2018/2 A company shows a taxable profit of € 1.3 million for t1 in the tax balance sheet. The income tax rate is 30%. In addition, net income under commercial law before taxes of € 1.6 million was reported in the same reporting period. What is the maximum amount this company can distribute to shareholders from the annual results of the current reporting period? Present your calculations comprehensibly!The accountant for Lajamanu Production Ltd has the task of preparing the deferred tax entries in the year-end financial statements at 30th June 2022. The company has been expensing research in a new product for a number of years. The directors are now of the opinion that the product will have a viable market and that further expenditure can be capitalised as a development asset. With this in view $160,000 was expended on 1st July 2021. It is believed that this expenditure will be recovered over a five year period and is to be amortised on a straight line basis at 20% per annum. The project does not qualify for any accelerated tax deductions over and above the full cost incurred. Required As the accountant has only recently been recruited you have been asked to complete the preparation of the journal entry adjustments for any temporary tax differences and to explain in each of the situations given above the reasons for the adjustments, why the accounts have been chosen…PROBLEM 1 Xavier Company provided the following information for its first year of operations ended December 31, 2021 in connection with the preparation of its income tax return:Taxable income P 4,000,000Non-deductible expenses 200,000Non-taxable revenue 300,000Deferred income on installment saleincluded in financial income but taxable in 2022 450,000Doubtful accounts recorded 100,000Financial depreciation 300,000Tax depreciation 350,000Estimated warranty cost accrued in2021 but not deductible for tax purposes until paid…
- A company is preparing its financial statements for the year ending 31 March 2020. The initial trial balance has the following figures relating to tax Income tax payable at 1 April 2019 £25,325 Icome tax paid during the year ended 31 March 2020 £15,225 The estimated income tax liability for the year ended 31 March 2020 is £16,650. What is the income tax figure for inclusion in the company's statement of profit or loss for the year ended 31 March 2020?CHANGE IN ACCOUNTING PRINCIPLE EXERCISE DURING 2021, A CONSTRUCTION COMPANY THAT BEGAN OPERATIONS IN 2019 CHANGED FROM THE COMPLETED CONTRACT METHOD TO THE PERCENTAGE OF COMPLETION METHOD FOR ACCOUNTING PURPOSES BUT NOT FOR TAX PURPOSES. GROSS PROFIT FIGURES UNDER BOTH METHODS FOR THE PAST THRE YEARS APPEAR BELOW. ALSO, ASSUME THE FOLLOWING INFORMATION: • THE RETAINED EARNINGS BALANCE AS OF JANUARY 1, 2020 IS $2,000,000. TAX RATE – 30% Completed-Contract Percentage-of-Completion 2019 $ 484000 $ 911000 2020 635000 960000 2021 710000 1060000 $1829000 $2931000 REQUIRED: 1. SCENARIO 1 – PREPARE JOURNAL ENTRY, INCOME STATEMENT AND RETAINED EARNINGS STATEMENT, ASSUMING COMPARATIVE FINANCIAL STATEMENTS ARE ISSUED. 2. SCENARIO 2 – PREPARE JOURNAL ENTRY, INCOME STATEMENT AND RETAINED EARNINGS STATEMENT, ASSUMING COMPARATIVE FINANCIAL STATEMENTS ARE NOT ISSUED.On 1 January 2020 a company purchased some plant. The invoice showed Cost of plant £61,000 Delivery of factory £850 One-year warranty covering breakdown during 2020 £700 Import duty £3,250 Installation fees £2,000 Modifications costing £3,150 were necessary to enable the plant to be installed. What amount should be capitalised for the plant in the company's accounting records?
- What is the amount of net income after tax that Vignette Company should report for the year 2021? Vignette Construction Company changed from completed contract method to the percentage of completion method of accounting for long-term construction contracts during 2021. For tax purposes, the company employs the completed contract method and will continue this approach in the future. The appropriate information related to this change is as follows: Pre-tax Income from Percentage of Completion 2020 2,028,000 1,820,000 Completed Contract 1,534,000 1,248,000 2021 Income tax rate is 35%. What is the amount of net income after tax that Vignette Company should report for the year 2021? Your answerHypothetical Corporation incurred the following expenses: 2019 2020Research and Development 619,000 703,000 The new product will be available for sale July 1, 2021. Calculate the deduction for R&D expenses for 2019, 2020, and 2021 under the following independent assumptions:a. Armando Corporation elects to expense the R&D expenses. b. Armando Corporation elects to amortize the R&D expenses over 60 months.Bhekisizwe (Pty) Ltd, a micro business, registered its business at the commencement of the 2023 year of assessment and started trading immediately. Its cash turnover for the period was R650 000. Calculate the tax payable for Bhekisizwe (Pty) Ltd for the 2023 year of assessment. a. R5 650 b. R4 650 c. R1 650 d. R6 650