Balancing Charge – NBC Institute

TAX – Nov 2020 – L1 – SA – Q19 – Capital Gains Tax (CGT)

Calculate the balancing charge on the disposal of an asset.

Question

An asset with a tax written down value of N850,000 was sold for N1,230,000; what is the balancing charge?
A. N2,080,000
B. N1,230,000
C. N850,000
D. N380,000
E. N425,000

Answer

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Tags: Balancing Charge, Capital gains tax, Disposal of assets, Tax Written Down Value
Level: Level 1

Topic: Capital Gains Tax (CGT)
Series: NOV 2020

TAX – Nov 2016 – L2 – Q6 – Tax Planning and Management

Compute the capital allowances for John Bull Nigeria Limited over the first five years of assessment and allocate initial allowances.

Question

John Bull Nigeria Limited, a manufacturing company, commenced business on August 1, 2011, and prepared accounts to July 31 each year. The company incurred the following qualifying capital expenditure:

July 1, 2011: Plant and Equipment (N500,000)
October 31, 2011: Motor Vehicle (N300,000)
December 13, 2011: Factory Building (N400,000)
January 15, 2012: Motor Vehicle (N1,000,000)
June 1, 2012: Plant and Equipment (N200,000)

The following disposals were made:

Part of equipment bought for N200,000 on July 1, 2010 was sold for N50,000 on December 31, 2013.
Motor vehicle bought for N300,000 on October 31, 2011, was sold for N400,000 on December 31, 2012.

Required:
a. Compute Capital Allowances for the first FIVE Years of Assessment. (11 Marks)
b. Place the assets in the relevant Years of Assessment for the purpose of initial allowance. (2 Marks)
c. Compute the Balancing Charge or Allowance in relation to the assets disposed. (2 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Asset Disposals, Balancing Allowance, Balancing Charge, Capital Allowance, Fixed Assets, Qualifying Expenditure
Level: Level 2

Topic: Tax Planning and Management
Series: NOV 2016

TAX – Nov 2020 – L1 – SA – Q19 – Capital Gains Tax (CGT)

Calculate the balancing charge on the disposal of an asset.

Question

An asset with a tax written down value of N850,000 was sold for N1,230,000; what is the balancing charge?
A. N2,080,000
B. N1,230,000
C. N850,000
D. N380,000
E. N425,000

Answer

Find Related Questions by Tags, levels, etc.

Tags: Balancing Charge, Capital gains tax, Disposal of assets, Tax Written Down Value
Level: Level 1

Topic: Capital Gains Tax (CGT)
Series: NOV 2020

TAX – Nov 2016 – L2 – Q6 – Tax Planning and Management

Compute the capital allowances for John Bull Nigeria Limited over the first five years of assessment and allocate initial allowances.

Question

July 1, 2011: Plant and Equipment (N500,000)
October 31, 2011: Motor Vehicle (N300,000)
December 13, 2011: Factory Building (N400,000)
January 15, 2012: Motor Vehicle (N1,000,000)
June 1, 2012: Plant and Equipment (N200,000)

The following disposals were made:

Part of equipment bought for N200,000 on July 1, 2010 was sold for N50,000 on December 31, 2013.
Motor vehicle bought for N300,000 on October 31, 2011, was sold for N400,000 on December 31, 2012.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Asset Disposals, Balancing Allowance, Balancing Charge, Capital Allowance, Fixed Assets, Qualifying Expenditure
Level: Level 2

Topic: Tax Planning and Management
Series: NOV 2016

Question Tag: Balancing Charge

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TAX – Nov 2020 – L1 – SA – Q19 – Capital Gains Tax (CGT)

Calculate the balancing charge on the disposal of an asset.

TAX – Nov 2016 – L2 – Q6 – Tax Planning and Management

Compute the capital allowances for John Bull Nigeria Limited over the first five years of assessment and allocate initial allowances.

TAX – Nov 2020 – L1 – SA – Q19 – Capital Gains Tax (CGT)

Calculate the balancing charge on the disposal of an asset.

TAX – Nov 2016 – L2 – Q6 – Tax Planning and Management

Compute the capital allowances for John Bull Nigeria Limited over the first five years of assessment and allocate initial allowances.

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TAX – Nov 2020 – L1 – SA – Q19 – Capital Gains Tax (CGT)

Calculate the balancing charge on the disposal of an asset.

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TAX – Nov 2016 – L2 – Q6 – Tax Planning and Management

Compute the capital allowances for John Bull Nigeria Limited over the first five years of assessment and allocate initial allowances.

You're reporting an error for "TAX – Nov 2016 – L2 – Q6 – Tax Planning and Management"

TAX – Nov 2020 – L1 – SA – Q19 – Capital Gains Tax (CGT)

Calculate the balancing charge on the disposal of an asset.

You're reporting an error for "TAX – Nov 2020 – L1 – SA – Q19 – Capital Gains Tax (CGT)"

TAX – Nov 2016 – L2 – Q6 – Tax Planning and Management

Compute the capital allowances for John Bull Nigeria Limited over the first five years of assessment and allocate initial allowances.

You're reporting an error for "TAX – Nov 2016 – L2 – Q6 – Tax Planning and Management"

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