Questions and answers: CPA Advanced Taxation

Q&A Categories

• History and Government
• Christian Religious Education (CRE)
• IRE
• Mathematics
• Physics
• Biology
• Geography
• Chemistry
• English
• English Literature
• Commercial and Administrative Law
• Business Studies
• Diploma in ECDE
• Certificate in ECDE
• Computer Studies
• Computer Science
• Kiswahili
• Agricuture
• Home Science
• Accounting
• Economics
• CPA Financial Accounting
• CPA Commercial Law
• Entrepreneurship and Communication
• CPA Quantitative Analysis
• CPA Economics
• CPA Company Law
• CPA Financial Management
• CPA Taxation
• CPA Cost Accounting
• CPA Financial Reporting
• CPA Advanced Financial Reporting
• CPA Auditing and Assurance
• CPA Advanced Taxation
• CPA Management Information Systems
• CPA Advanced Auditing and Assurance
• CPA Strategy, Governance and Ethics
• CPA Advanced Management Accounting
• CPA Advanced Financial Management
• ATD Information Communication Technology
• ATD Auditing
• ATD Financial Accounting
• ATD Principles of Management
• ATD Business Mathematics
• ATD Business Mathematics
• PTE Home Science
• ATD Fundamentals of Finance

129 Questions  View: All | Solved | Unsolved

Search Results...

• Explain five types of notices of assessment(Solved)
  

  Explain five types of notices of assessment

  Date posted: February 25, 2019.  

• What are the contents of a notice of assessment?(Solved)
  

  What are the contents of a notice of assessment?

  Date posted: February 25, 2019.  

• Write brief notes on back duty.(Solved)
  

  Write brief notes on back duty.

  Date posted: February 25, 2019.  

• Explain what is meant by Tax Avoidance?(Solved)
  

  Explain what is meant by Tax Avoidance?

  Date posted: February 25, 2019.  

• Explain the meaning of tax evasion(Solved)
  

  Explain the meaning of tax evasion

  Date posted: February 25, 2019.  

• State the conditions which should be fulfilled before an exemption from payment of tax is granted under the V AT and Customs and Excise Acts.(Solved)
  

  State the conditions which should be fulfilled before an exemption from payment of tax is granted under the V AT and Customs and Excise Acts.

  Date posted: February 25, 2019.  

• It may be advantageous for a trader whose turnover is below the legislated turnover limits under the sixth schedule to the V AT Act to...(Solved)
  

  It may be advantageous for a trader whose turnover is below the legislated turnover limits under the sixth schedule to the V AT Act to register for VAT voluntarily. Under what circumstances could this be beneficial?

  Date posted: February 25, 2019.  

• Mrs. Carol Wasike is a practicing accountant working under the style and name of Wasike and Associates. Her firm is registered for Value Added Tax...(Solved)
  

  Mrs. Carol Wasike is a practicing accountant working under the style and name of Wasike and Associates. Her firm is registered for Value Added Tax (VAT). During the month of September 2001, she undertook and completed the following assignments: Required: (a) Prepare a VAT Account for Wasike and Associates for the month of September 2001. (b) The VAT you have computed in (a) above, was paid on 22 October 2001 since 20 October was on a Saturday. The VAT return was also submitted on the same day. How much additional tax would be payable, if any? (c) Kikwetu Limited was the subject of a creditors voluntary winding up and the appropriate resolution was passed on 1 April 2002. By that time the company paid Wasike and Associates only Sh.240,000 for services rendered. Assuming that all the conditions for the refund of bad debt relief are met, calculate the amount of VAT bad debt relief.

  Date posted: February 25, 2019.  

• Mr. Joseph Omuora commenced a soft drinks distribution business on 1 January 1998. He has not been maintaining proper books of account and the Commissioner...(Solved)
  

  Mr. Joseph Omuora commenced a soft drinks distribution business on 1 January 1998. He has not been maintaining proper books of account and the Commissioner of Income Tax has raised doubts about the accuracy of the annual tax returns submitted by him. You have been appointed to estimate the correct amounts of taxable incomes for the years ended 31 December 1998, 1999, 2000, 2001 for comparison with those disclosed in the annual returns. These returns had disclosed the following profits or losses:

  Date posted: February 25, 2019.  

• The following is a summary of the sales and purchases of Panda Limited for the six months ended 31 December 2003:(Solved)
  

  The following is a summary of the sales and purchases of Panda Limited for the six months ended 31 December 2003: Required: VAT account for the six-month period ended 31 December 2003. (Where applicable, the transactions are exclusive of VAT at the standard rate).

  Date posted: February 25, 2019.  

• ABC Ltd. has VAT due amounting to Sh. 3,600,000. It was late in making the returns and payment of the amount due by five months.(Solved)
  

  ABC Ltd. has VAT due amounting to Sh. 3,600,000. It was late in making the returns and payment of the amount due by five months. Required: The penalties that ABC Ltd. will be required to pay by the VAT Department.

  Date posted: February 25, 2019.  

• Mediner Ltd. deals in a variety of goods in the month of September 2004, the Company accountant recorded the following transactions (exclusive of VAT):(Solved)
  

  Mediner Ltd. deals in a variety of goods in the month of September 2004, the Company accountant recorded the following transactions (exclusive of VAT): The accountant believes that the allocative method is the best in restricting the input VAT deductible against output VAT. The accountant is also of the opinion that on average, twenty percent of the standard rate purchases were sold as standard rate sales. Required: Compute the input VAT deductible against output VAT using the allocative method.

  Date posted: February 25, 2019.  

• Explain how section 19 (1) of the VAT Act, on recovery of “tax due and payable from a person who owes money to the tax...(Solved)
  

  Explain how section 19 (1) of the VAT Act, on recovery of “tax due and payable from a person who owes money to the tax payer” may be enforced by the commissioner.

  Date posted: February 25, 2019.  

• Explain the requirements of an application for refund of VAT paid in respect of Bad debts.(Solved)
  

  Explain the requirements of an application for refund of VAT paid in respect of Bad debts.

  Date posted: February 25, 2019.  

• Explain briefly the meaning of “goods subject to customs control” under the Customs and Excise Act (Cap. 472)(Solved)
  

  Explain briefly the meaning of “goods subject to customs control” under the Customs and Excise Act (Cap. 472)

  Date posted: February 25, 2019.  

• Name four incentives given by the government to encourage the growth of capital market in Kenya(Solved)
  

  Name four incentives given by the government to encourage the growth of capital market in Kenya

  Date posted: February 25, 2019.  

• Explain the term “thin capitalization.”(Solved)
  

  Explain the term “thin capitalization.”

  Date posted: February 25, 2019.  

• List four circumstances under which duty paid on imports is refundable(Solved)
  

  List four circumstances under which duty paid on imports is refundable

  Date posted: February 25, 2019.  

• The following information relates to Vuma Limited. For the year ended 31 December 2004,(Solved)
  

  The following information relates to Vuma Limited. For the year ended 31 December 2004, 1. The company's operating profit before tax amounted to sh. 2,000,000, excluding sh. 400,000 from investment activities 2. The company intends to distribute sh. 200,000 as dividend for the year ended 31 December 2004. 3. The corporate tax is 30%, Required: Compute the shortfall tax payable by Vuma Limited for the year ended 31 December 2004.

  Date posted: February 25, 2019.  

• Under what circumstances are imported goods considered to have been dumped in your country.(Solved)
  

  Under what circumstances are imported goods considered to have been dumped in your country.

  Date posted: February 25, 2019.  

• The following details were extracted from the books of Abib Traders. VAT No.A11146789P for the month of December 2005.(Solved)
  

  The following details were extracted from the books of Abib Traders. VAT No.A11146789P for the month of December 2005.

  Date posted: February 25, 2019.  

• Mr. A. Wakaba started a retail business on 1 January 2000. He has not been filling income tax returns for the six years to 31...(Solved)
  

  Mr. A. Wakaba started a retail business on 1 January 2000. He has not been filling income tax returns for the six years to 31 December 2005. An investigation of his affairs revealed the following: 1. The balance sheet of the retail business as at 31 December 200 was as shown below:

  Date posted: February 25, 2019.  

• Zawadi Ltd is a Nakuru based company dealing in a variety of VAT designated goods. The following transactions were recorded for the month of September...(Solved)
  

  Zawadi Ltd is a Nakuru based company dealing in a variety of VAT designated goods. The following transactions were recorded for the month of September 2006:

  Date posted: February 25, 2019.  

• Mr. Dickson Maelfu is a-businessman with interests in the manufacturing sector. He is facing a back duty investigation by the revenue authority which suspects that...(Solved)
  

  Mr. Dickson Maelfu is a-businessman with interests in the manufacturing sector. He is facing a back duty investigation by the revenue authority which suspects that he has been under - declaring income four years from year 2003 to year 2006. You are the head of the team from the revenue authority conducting this investigation. Maelfu has submitted to you records of his private and business assets and liabilities from 1 January 2003 to 31 December 2006 as shown below.

  Date posted: February 25, 2019.  

• Mr. Elias Hodari is a businessman dealing in both vatable and non vatable goods. He is registered for value added tax (VAT) purposes. The following transactions...(Solved)
  

  Mr. Elias Hodari is a businessman dealing in both vatable and non vatable goods. He is registered for value added tax (VAT) purposes. The following transactions relate to his business during the month of April 2008: 7 April: Imported men's suits from Dubai (United Arab Emirate) for sh. 3,600,000. 9 April: Purchased motor vehicle spare parts from a local dealer for sh. 500,000. 10 April: Exported motor vehicle spare parts to Uganda and received sh. 800,000. 14 April: Sold ten bales of second hand clothes to retail traders at a local market for sh. 80,000 per. bale, 14 April: Purchased materials to construct a godown at Nairobi's Industrial area for sh. 960,000. 17 April: Paid the godown construction firm a deposit of sh 800,000 to commence the construction. The contract price was agreed at sh. 1,800,000 with the balance being payable on completion of the" go- down construction. 21 April: Sold men's suits to a local trader for sh. 4,800,000. 22 April: Supplied motor vehicle spare parts worth sh. 600,000 to the Armed forces of Kenya. 25 April: Purchased women's clothes from a local fashion designer for sh. 1,200,000. 25 April: Supplied non-vatable goods to a VAT registered trader for.sh. 900,000. 26 April: Some of the men's suits imported from Dubai were found to be of poor quality and returned to the exporter in Dubai. A credit note of sh. 450,000 was issued by the exporter to Mr. Hodari. 30 April: The Company's hired godown was broken into and men's suits valued at sh. 720,000 were stolen. Transactions are stated as VAT inclusive where applicable The standard rate of VAT is 16%. Required: The VAT payable (or refundable) by Mr. Hodari for the month of April 2008 (ignore customs duty and restrictions on deductible input tax).

  Date posted: February 25, 2019.  

• Samia Ltd. reported the following income during the year ended 31 December 2007:(Solved)
  

  Samia Ltd. reported the following income during the year ended 31 December 2007:

  Date posted: February 25, 2019.  

• Alexus Mumila has not maintained proper books of account for his business since commencing operation in year 2005. An investigation of his personal and business assets...(Solved)
  

  Alexus Mumila has not maintained proper books of account for his business since commencing operation in year 2005. An investigation of his personal and business assets and liabilities revealed the following balances at the end of each of the years specified below: Required: i. Capital statements for each of the years ended 31 December 2005, 2006, 2007 and 2008 ii. Taxable income (if any) of Alexus Munila for each of the years ended 31 December 2006, 2007 and 2008 iii. Comment on any issues that you may wish to seek clarification on from Alexus Munila based on your analysis in (i) and (ii) above.

  Date posted: February 25, 2019.  

• Mwanzo Ltd made sales to Mwisho Ltd. as shown below during the month of October 2009.(Solved)
  

  Mwanzo Ltd made sales to Mwisho Ltd. as shown below during the month of October 2009. Mwisho Ltd. was wound up on 30 October 2009 by which date the company had paid Sh. 5,000,000 to Mwanzo Ltd in relation to the transaction for October 2009. Assume the payments by Mwisho Ltd. were made in proportion to the nature of sales Amounts are reported as exclusive of VAT at the rate of 16% where applicable. Required: Determine the bad debt relief due to Mwanzo Ltd. in relation to the above transaction

  Date posted: February 25, 2019.  

• Briefly explain two conditions under which bad debt relief on VAT might be provided(Solved)
  

  Briefly explain two conditions under which bad debt relief on VAT might be provided

  Date posted: February 25, 2019.  

• Makosa Maingi has not been maintaining proper books of accounts since inception of the business in the year 2007. The following balances were obtained from...(Solved)
  

  Makosa Maingi has not been maintaining proper books of accounts since inception of the business in the year 2007. The following balances were obtained from the available business records for the four-year period ended 31 December 2010

  Date posted: February 25, 2019.