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- Jared Kimutai and Peter Wakoli have been trading in partnership as Kimwa enterprises for the past ten years. The business was converted into a private...(Solved)
Jared Kimutai and Peter Wakoli have been trading in partnership as Kimwa enterprises for the past ten years. The business was converted into a private limited liability company Mwanzo limited on 1 October 2005 with the partners becoming the directors of the new company
The following details were availed to you assist in the filing of tax returns for the financial year ended 31 December 2005
Date posted: February 25, 2019. Answers (1)
- Christine Atieno and Rose Njeri started a law firm as partners on 1st January 2007. They named the firm Atieno, NJeri and Associates. The partners...(Solved)
Christine Atieno and Rose Njeri started a law firm as partners on 1st January 2007. They named the firm Atieno, NJeri and Associates. The partners opened a joint bank account where Njeri deposited sh. 3,000,000 and Atieno sh. 2,000,000 as initial capital. They also agreed that profits and losses would be shared in the ratio of the initial of their capital contributions. Further, they agreed that interest on capital on capital would be paid at 5% per annum based on the initial capital contributions.
On 5th January, 2007 the firm signed a six year lease for an office at an annual lease payments of sh. 200,000. The lease contract required the partners to deposit a lump sum to cover the lease payments for the first two years of lease term
On 11th January, 2007 the firm purchased the following assets for use in the business
Date posted: February 25, 2019. Answers (1)
- Chunga Insurance Company Ltd. has provided the following details with respect to its financial year ended 31 December 2007:(Solved)
Chunga Insurance Company Ltd. has provided the following details with respect to its financial year ended 31 December 2007:
Date posted: February 25, 2019. Answers (1)
- Lima and Panda started a partnership business on 1 January 200. However, Lima retired from the partnership on 30 June 2007 on health grounds.
The business...(Solved)
Lima and Panda started a partnership business on 1 January 200. However, Lima retired from the partnership on 30 June 2007 on health grounds.
The business did not maintain proper books of account for the year ended 31 December 2007
Panda has approached you with the following extracts and information to assist him determine the profit or loss for the year ended 31 December 2007
1. Bank deposit during the year were as follows
Date posted: February 25, 2019. Answers (1)
- Jostina and Maweu are partners running hardware business based in Nanyuki Town. They have approached you to assist them prepare the partnership return for the...(Solved)
Jostina and Maweu are partners running hardware business based in Nanyuki Town. They have approached you to assist them prepare the partnership return for the year ended 31 December 2011. The following information has been presented to you
1. The partnership agreement provides that:-
- Profit and losses will be apportioned in the ratio of 2:1 for Jostina and Maweu respectively.
- Partner will be allowed to withdraw up to Sh. 100,000. In cash without being charged interest. Any excess withdrawals will be subject to interest at a rate of 8% per annum
- Each partner will be entitled to a monthly salary of sh. 60,000 per month. However, no salary would be paid to any partner in the months of January, May and September due to expected low sales based on analysis of past trends. Partners would also be entitled to a commission
2. The balances in the books of account as at 31st December 2011 and 31st December 2010 included the following:
Date posted: February 25, 2019. Answers (1)
- 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...(Solved)
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
Date posted: February 25, 2019. Answers (1)
- Sporting members club was formed in November 2007 but became operational on1 January 2008. For the year ended 31 December 2008. The club did not...(Solved)
Sporting members club was formed in November 2007 but became operational on1 January 2008. For the year ended 31 December 2008. The club did not submit income tax returns. The club manager argued that section 21 of the income Tax Act excluded the club from taxation.
However upon being advised by one of the club members to consult a tax expert on the issue, the manager has approached you for further clarification and has provided the following information
Date posted: February 25, 2019. Answers (1)
- The following information relates to Kwanzari Savings and Credit Cooperative Society Ltd for the year ended 31 December 2008,(Solved)
The following information relates to Kwanzari Savings and Credit Cooperative Society Ltd for the year ended 31 December 2008,
Date posted: February 25, 2019. Answers (1)
- Bahati and Omari have been trading as partners under the name Boma Enterprises. They have provided you with the following information relating to their business...(Solved)
Bahati and Omari have been trading as partners under the name Boma Enterprises. They have provided you with the following information relating to their business for the year ended 31 December 2008:
Date posted: February 25, 2019. Answers (1)
- Majengo contractors limited operate in the construction industry. On 1st November, 2007, the company won a tender for the construction of two projects; a hospital...(Solved)
Majengo contractors limited operate in the construction industry. On 1st November, 2007, the company won a tender for the construction of two projects; a hospital and an office complex. Construction of the project on 1st January2008
The following details relate to the two projects for the year ended 31 December, 2009
Required:
Taxable profit or loss arising from each of the two construction projects for the year ended 31 December 2009
Date posted: February 25, 2019. Answers (1)
- The following information relates to Zawadi Savings and Credit Co-operation Society Ltd. for the year ended 31 December 2009:(Solved)
The following information relates to Zawadi Savings and Credit Co-operation Society Ltd. for the year ended 31 December 2009:
Date posted: February 25, 2019. Answers (1)
- The following relates to ABC life assurance company limited for the year ended 31 December 2009:(Solved)
The following relates to ABC life assurance company limited for the year ended 31 December 2009:
Required:
Taxable income of ABC Assurance company limited for the year ended 31 December 2009
Date posted: February 25, 2019. Answers (1)
- Bamba Limited was in Kenya in the year 2008. The company later transferred its head office to Uganda but retained a subsidiary company, Bao Limited...(Solved)
Bamba Limited was in Kenya in the year 2008. The company later transferred its head office to Uganda but retained a subsidiary company, Bao Limited in Kenya.
The following statement of comprehensive income for the year ended 31 December 2010 was provided by the management of Bamba Limited and Bao Limited
Required:
i) A columnar statement of taxable income for Bamba limited and Bao Limited for the year ended 31 December 2010
ii) Tax payable (if any) by Bamba Limited and Bao Limited from the income computed in (i) above
Date posted: February 25, 2019. Answers (1)
- Moto General Insurance Company Ltd, provided the following detail's/with respect to the financial year ended December 2010(Solved)
Moto General Insurance Company Ltd, provided the following detail's/with respect to the financial year ended December 2010
Date posted: February 25, 2019. Answers (1)
- Ujenzi Contractors is a firm engaged in the property development business. During the year ended 31 December 2011, the firm secured three construction contracts namely;...(Solved)
Ujenzi Contractors is a firm engaged in the property development business. During the year ended 31 December 2011, the firm secured three construction contracts namely; X, Y and Z. The firm computes taxable income from the contracts on the basis of the percentage of completion method.
The information relating to the three contracts is as follows:
Date posted: February 25, 2019. Answers (1)
- Bima Insurance Company Limited provided the following information for the year ended 31 December 2011.(Solved)
Bima Insurance Company Limited provided the following information for the year ended 31 December 2011.
Date posted: February 25, 2019. Answers (1)
- Peter and Kilaka are in a small partnership business trading as Peki Enterprises and sharing profits and losses in ratio of 3:2 respectively. The following...(Solved)
Peter and Kilaka are in a small partnership business trading as Peki Enterprises and sharing profits and losses in ratio of 3:2 respectively. The following details relate to the business for the year ended 31 December 2011.
Date posted: February 25, 2019. Answers (1)
- Weco Ltd is a company incorporated in Kenya. The company controls 80% of the share capital of Jazi Ltd which is also incorporated in Kenya.
The...(Solved)
Weco Ltd is a company incorporated in Kenya. The company controls 80% of the share capital of Jazi Ltd which is also incorporated in Kenya.
The following is a statement of comprehensive income of Weco Ltd. for the year ended 31 December 2011.
Required:
i) A statement of adjusted taxable profit or loss for the year ended 31 December 2011.
ii) A schedule showing the final tax payable on or before the sixth, month after the end of the accounting year if the tax liability for the year ended 31 December 2010 was Sh.25,000,000
Date posted: February 25, 2019. Answers (1)
- Sakata Contractors Ltd. has been in the construction business for many years.
The following information relates to one of its construction contracts for the year ended...(Solved)
Sakata Contractors Ltd. has been in the construction business for many years.
The following information relates to one of its construction contracts for the year ended 31 December 2011:
Additional information:
1. Wear and tear allowance is at the rate of 12.5%,
2. The company recognises two thirds of annual profits when they arise
3. Any contract losses are recognised in full in the year of their occurrence
Required
i) Contract profit or loss for the year ended 31 December 2011.
ii) Taxable profit or loss for the year ended 31 December 2011 assuming that there were no other contracts with a significant degree of completion.
Date posted: February 25, 2019. Answers (1)
- You have been engaged as a tax consultant by Mavuno Bank Ltd. The bank has provided the following details in respect of its operations and...(Solved)
You have been engaged as a tax consultant by Mavuno Bank Ltd. The bank has provided the following details in respect of its operations and balances for the year ended 31 December 2011
Required;-
i) A statement of adjusted taxable profit or loss for the year ended 31 December 2011.
ii) Tax liability of the bank, if any.
iii) Identify any further details that you might require from the bank's management in order to determine the accuracy of your computations in (i) and (ii) above.
Date posted: February 25, 2019. Answers (1)