- The revenue authority may send its officers to employers‘ paying points to check the operations of the pay as you earn (PAYE) system
Outline the key...(Solved)
The revenue authority may send its officers to employers‘ paying points to check the operations of the pay as you earn (PAYE) system
Outline the key areas that officers should include in the audit procedures on the operations of PAYE system
Date posted: February 14, 2019. Answers (1)
- Bora Limited presented the following trading profit and loss account for the year ended 31 December 2007
Determine:
i) Adjusted taxable profit or loss of Bora Limited...(Solved)
Bora Limited presented the following trading profit and loss account for the year ended 31 December 2007
Determine:
i) Adjusted taxable profit or loss of Bora Limited for the year ended 31 December 2007
ii) Tax liability (if any) arising from the profit or loss accounted in (i) above
Date posted: February 14, 2019. Answers (1)
- Outline each of the following
i) Instruments subject to stamp duty
ii) Commissioner‘s power to dispose off abandoned goods under the customs and Exercise Act(Solved)
Outline each of the following
i) Instruments subject to stamp duty
ii) Commissioner‘s power to dispose off abandoned goods under the customs and Exercise Act
Date posted: February 14, 2019. Answers (1)
- The following information relate to the income received by Faida Limited for the year ended 31 December 2008:
For the year ended 31 December 2008, determine...(Solved)
The following information relate to the income received by Faida Limited for the year ended 31 December 2008:
For the year ended 31 December 2008, determine for Faida limited
i) Taxable profit or loss
ii) Tax liability (if any)
iii) Installment tax due and the dates of payment
Date posted: February 14, 2019. Answers (1)
- The following statement of comprehensive income was prepared by Daura pharmaceuticals limited for the year ended 31 December 2008:
Determine:
a) Taxable profit of Duara Pharmaceutical limited...(Solved)
The following statement of comprehensive income was prepared by Daura pharmaceuticals limited for the year ended 31 December 2008:
Determine:
a) Taxable profit of Daura Pharmaceutical limited for the year ended 31 December 2008
b) Tax liability (if any) for the company
Date posted: February 14, 2019. Answers (1)
- Explain how tax policy can be used to promote the growth of small and medium size enterprises (SME‘s) in your country(Solved)
Explain how tax policy can be used to promote the growth of small and medium size enterprises (SME‘s) in your country
Date posted: February 14, 2019. Answers (1)
- Jostina and Maweu are partners running a hardware business based in Nanyuki town. They have approached you to assist them prepare the partnership returns for...(Solved)
Jostina and Maweu are partners running a hardware business based in Nanyuki town. They have approached you to assist them prepare the partnership returns for the year ended 31 December 2008. The following information has been presented to you
Determine:
a) Taxable profit or loss of the partnership for the year ended 31 December 2008
b) A schedule showing the allocation of taxable income / loss to partners
Date posted: February 14, 2019. Answers (1)
- Mr. Casper Amuto is employed as a finance director by Damida Limited. He controls 20% of the company‘s voting share capital.
He reported the following details...(Solved)
Mr. Casper Amuto is employed as a finance director by Damida Limited. He controls 20% of the company‘s voting share capital.
He reported the following details on his income and that of his wife for the year ended 31 December 2008:
Determine:
a) Taxable incomes of Mr. Casper Amuto and his wife
b) Tax due on the incomes computed in (a) above
Date posted: February 14, 2019. Answers (1)
- The management of Haraka Company Ltd has not been maintaining proper books of account. You have been engaged by the management at a fee of...(Solved)
The management of Haraka Company Ltd has not been maintaining proper books of account. You have been engaged by the management at a fee of Sh1,500,000 to ascertain the company's tax position. The following information has been availed to you for the year ended 31 December 2008:
Determine:
(a) Taxable profit of Haraka Company Ltd. for the year ended 31 December 2008.
(b) Tax liability accruing from the profit computed In (a) above.
(c) Assuming that the company's tax liability in year 2007 was Sh.300,000, show how and when tax computed in (b) above would be paid.
Date posted: February 14, 2019. Answers (1)
- Joma, Sego and Kali are partners operating under the name Joseka Enterprises. They share profits and losses in the ratio of 3:1:1 for Joma, Sego...(Solved)
Joma, Sego and Kali are partners operating under the name Joseka Enterprises. They share profits and losses in the ratio of 3:1:1 for Joma, Sego and Kali respectively.
The business started operations on I January 2009 by purchasing a go-down constructed in 1960 for Sh.2,000,000 and renovating it at a cost of Sh.3,600,000 for use as a factory. The purchase cost of the go-down included the cost of land amounting to Sh.1,000,000. One third of the renovated factory area is used as a warehouse for raw materials and finished goods.
The following additional assets were acquired before commencement of operations:
Determine, for the year ended 31 December 2009:
(i) The adjusted taxable profit for the partnership.
(ii) The taxable income for each of the partners
Date posted: February 14, 2019. Answers (1)
- Explain the following:
(b) Concept of residence for incorporated entities.
(c) Deductions allowed against rental income(Solved)
Explain the following:
(b) Concept of residence for incorporated entities.
(c) Deductions allowed against rental income
Date posted: February 13, 2019. Answers (1)
- Companies undergoing the process of liquidation are required to address a number of issues, one of which concerns taxation of the income received by the...(Solved)
Companies undergoing the process of liquidation are required to address a number of issues, one of which concerns taxation of the income received by the company or distributed to shareholders as dividend.
In the context of the above statement, briefly explain the taxation of the following:
i) Income received by company under liquidation.
ii) Dividend distributed to shareholders during the process of liquidation.
Date posted: February 13, 2019. Answers (1)
- Linda Insurance Company Ltd. provides motor vehicle and fire insurance covers to its policy holders
The following Information was extracted from the financial records of the...(Solved)
Linda Insurance Company Ltd. provides motor vehicle and fire insurance covers to its policy holders
The following Information was extracted from the financial records of the company for the year ended 31 December 2009:
Prepare:
i) The taxable profit / loss for Linda insurance Company limited for the year ended 31 December 2009
ii) Tax payable (if any) by the company for the year ended 31 December 2009
Date posted: February 13, 2019. Answers (1)
- The Commissioner for Domestic Taxes may require certain persons either in their individual or official capacity to furnish a return of income to the revenue...(Solved)
The Commissioner for Domestic Taxes may require certain persons either in their individual or official capacity to furnish a return of income to the revenue authority at any time. List two categories of such persons.
Date posted: February 13, 2019. Answers (1)
- Rift Valley Ltd. is in the business of farming. The following income statement was obtained from the books of the company for the year ended...(Solved)
Rift Valley Ltd. is in the business of farming. The following income statement was obtained from the books of the company for the year ended 31 December 2009:
Prepare:
(i) A statement of adjusted taxable profit (or loss) for the year ended 31 December 2009.
(ii) Tax payable (if any) by the company
Date posted: February 13, 2019. Answers (1)
- Malipo Pole Traders sells television sets on hire purchase terms. The firm purchases the television sets at Sh.20,000 per unit. The terms of sale require...(Solved)
Malipo Pole Traders sells television sets on hire purchase terms. The firm purchases the television sets at Sh.20,000 per unit. The terms of sale require a deposit of Sh.4,000 per unit and seven monthly installments of Sh.3,000 each.
- For the year ended 31 December 2010, the business reported the following: 120 units were sold.
- 10 units were repossessed after two months' installments had been paid.
- Another 10 units were repossessed after three months installments had been paid. All the repossessed units were valued at Sh. 16,000 per unit.
- Total cash collected during the year was Sh.2,000,000.
- Salaries and wages for the year amounted to Sh.200,000.
Prepare Taxable profit or loss for Malipo Pole Traders for the year ended 31 December 2010.
Date posted: February 13, 2019. Answers (1)
- Amos Mamboleo has not been filing his annual income tax returns since he was employed. The revenue authority has issued him with an assessment for...(Solved)
Amos Mamboleo has not been filing his annual income tax returns since he was employed. The revenue authority has issued him with an assessment for the year 2010 of Sh.1,200,000 which he refutes. He has approached you for advice and has provided the following details:
1. Basic salary Sh.120,000 (pay as you earn tax Sh. 17,500) per month.
2. The employer contributed for him Sh.8,000 per month to his children‘s education insurance policy.
3. He had salary arrears for the year 2009 of Sh400,000 which he was paid on 1 July 2010. His gross salary during the year 2009 was Sh960,000 (pay as you earn tax Sh184,000)
4. He secured a bank loan on 1 October 2010, of sh.4,800,000 at 15% interest per month which he used to purchase a house. He leased the house to the employer at a monthly rental income of Sh 80,000 which effect from 1 November 2010.
5. He is housed by the employer in a leased house where the company pays rent on quarterly basis of Sh300,000 per quarter.
6. He controls 18% of the share capital issued by the employer. During the year ended 31 December 2010, he received dividends on the shares of Sh.95,000 net of withholding tax.
7. He uses a company car of the employer has leased at a monthly charge of Sh40,000.
8. His other income comprised:
Prepare:
(i) Taxable income and the tax thereon for Amos Mamboleo for the year ended 31 December 2010.
(ii) Advise Amos Mamboleo on whether he should object to the assessment issued by the revenue authority.
Date posted: February 13, 2019. Answers (1)
- Malipo Ltd. is in the business of packaging flowers for the export market. The following is the draft statement of comprehensive income for the year...(Solved)
Malipo Ltd. is in the business of packaging flowers for the export market. The following is the draft statement of comprehensive income for the year ended 31 December 2010:
Prepare:
(i) A statement of adjusted taxable profit or loss for the company for the year ended 31 December 2010.
(ii) Tax payable (if any) by the company for the year ended 31 December 2010.
Date posted: February 13, 2019. Answers (1)
- Outline four roles of professional ethics in tax practice(Solved)
Outline four roles of professional ethics in tax practice
Date posted: February 13, 2019. Answers (1)
- Charles Temo is expecting to retire from employment after six months. He will be sixty years of age at the time retirement. He expects to...(Solved)
Charles Temo is expecting to retire from employment after six months. He will be sixty years of age at the time retirement. He expects to receive both a lump sum amount on the date of retirement and an annuity payable over the next ten years or until his death, whichever occurs first.
He is aware that the government has introduced certain changes impacting on the taxation of pension income. He approached you for advice on how these changes could affect the taxation of his pension income.
Required:
With reference to the tax rules and regulations in force as at 31 December 2010, advise Charles Temo on taxation of pension income.
Date posted: February 13, 2019. Answers (1)