Calculate the Corporation Tax Liability of Full Tax Co

Assignment Help Accounting Basics
Reference no: EM132842728

Question - FULL TAX CO Full Tax Co. is incorporated and tax resident in Barbados. The audited financial statements for Full Tax Co. for year-end December 31, 2020 show an accounting profit after tax of $13,500 after charging the following:

Depreciation $5,300

Tax $1,500

Property Tax $10,000

Interest expense $15,000

Preference dividends of $40,000

Legal fees $110,000

Insurance of $75,000

Bad debts $4,000

Foreign Travel $1,500

Repairs and Maintenance $50,000

General expenses $60,000

Other Information

1. Property Tax of $6,000 was paid for the property on which the company's factory is located; $3,000 for the office premises and $1,000 for the director's home.

2. The insurance was paid for the factory and office premises.

3. The interest of $5,000 was payable at the company's financial year end.

4. The bad debt expense is a percentage of debtors at year-end.

5. The company paid interim ordinarily dividends totaling $10,000.

6. Repairs and miniatous include motor vehicle repairs of $30,000 and redoing the office floor; changing it floor wooden flooring to porcelain titles. 7. Included in the company's total assessable income is exempt income of $30,000. $6,500 relates to expenses incurred in earning this exempt income.

8. Legal fees comprise expenses in respect of recovery of debts, $20,000. Expenses in relation to the purchase of new subsidiary $50,000. Expenses related to the increase private share capital, $40,000 of a subsidiary company located in Jamaica.

9. Foreign travel expense was a vacation package for the purchasing of marketing manager's (who met with company's clients) and his family plane tickets.

10. General expenses include $12,000 for the school fees of the director's son.

11. During the year Full Tax Co. invested $10,000 in the Enterprise Growth Fund. A certificate was obtained to support this investment.

12. During the year the company obtained an internationally recognized environmental certification. Expenditure incurred to obtain this certification was $20,000. The company obtained a grant from the government to fund this expenditure.

13. The capital allowances have been calculated at $13,550.

Required -

Calculate the Corporation Tax Liability of Full Tax Co. for Y/A: 2020. Using the Barbados Income Tax Act or any other relevant document explain the treatment of the items included or omitted from the income tax computation. The tax rates for general business in Barbados applies.

Assume capital allowance rate of 5 % p.a for building.

Please note that all amounts are in Barbadian currency.

Reference no: EM132842728

Questions Cloud

Determine the amount the right-of use asset : Determine the amount the right-of use asset and lease liability are initially measured at from the perspective of the lessee
What is the effective interest rate : a) How much does the firm need to borrow from the bank? b) What is the effective interest rate if the firm uses this line of credit with the compensating balan
Give three specific reasons for voting for jackson : Assume you are an eligible voter in 1828 (and if you don't know who's eligible, look into it!). Give three specific reasons for voting FOR Jackson
How did the american economy adapt to war : How did the American economy adapt to war? How did Franklin Roosevelt and A. Philip Randolph address racial discrimination in the workforce?
Calculate the Corporation Tax Liability of Full Tax Co : Calculate the Corporation Tax Liability of Full Tax Co. for Y/A: 2020. Using the Barbados Income Tax Act or any other relevant document
Find out financing and investing decisions : Could you please provide a brief statement that discusses one of the four types of Financial Ratios
What were the most significant influences on founding father : What were the most significant influences on the Founding Fathers? Christianity, Deism, Freemasonry, Science, something else, or some combination of factors?
BSBINM601 Manage Knowledge and Information Assignment : BSBINM601 Manage Knowledge and Information Assignment Help and Solution, Strathfield College - Assessment Writing Service
Find Total Debt and Owners Equity : The company expects next year growth to be 15% and a Pro Forma retention ratio Amount of $10,000. Find Total Debt + Owners Equity

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd