The following information was presented to you by the management of Malipo Pole Enterprises limited. The company deals in the sale of photocopier machines on...

      

The following information was presented to you by the management of Malipo Pole Enterprises limited. The company deals in the sale of photocopier machines on hire purchase terms
1. The company purchases photocopier machines at sh. 60,000 each
2. The hire purchase price per unit comprises a deposit of sh. 16,000 and eight quarterly installments of sh. 8,000. The cash price per unit is sh. 70,000
3. During the year ended 31 December 2008, the company sold 4,040 units of which collections of sh. 960,000 were received as at the year end.
4. During the year ended 31 December 2008, the company repossessed 40 units which had been sold earlier in the year.
5. Operating expenses during the year amounted to sh. 7,400,000
6. The revenue authority has reached an agreement with the management of the company whereby profits for tax purposes will be determined on the basis of proportionate cash collected from customers for the year’s sales.

Required:
a) Taxable income or losses of Malipo Pole enterprises Limited for that year 31 December, 2008
b) Distinguish between an operating lease and a finance lease in the context tax of law and regulations

  

Answers


Wilfred
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Wilfykil answered the question on February 25, 2019 at 06:58


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