- 15 Marks
ATAX – Nov 2016 – L3 – Q4b – Corporate Tax Compliance and Reporting
Compute the relevant tax liabilities for Gringrin Nigeria Ltd. in scenarios with different accounting dates
Question
Gringrin Nigeria Limited is proposing to embark on two courses of action:
i) Change its accounting date from March 31 to June 30; or
ii) Change its accounting date from March 31 to December 31.
The adjusted profits in each scenario are as follows:
- Change to June 30:
| Period | Adjusted Profits (N’000) |
|---|---|
| Year ended March 31, 2011 | 30,000 |
| Year ended March 31, 2012 | 33,000 |
| Period ended June 30, 2013 (15 months) | 78,000 |
| Year ended June 30, 2014 | 34,000 |
- Change to December 31:
| Period | Adjusted Profits (N’000) |
|---|---|
| Year ended March 31, 2011 | 50,000 |
| Year ended March 31, 2012 | 60,000 |
| Period ended December 31, 2013 (21 months) | 180,000 |
| Year ended December 31, 2014 | 70,000 |
As the Tax Consultant, you are required to:
Compute the relevant tax liabilities. (15 Marks)
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