Basis Periods – NBC Institute

TAX – May 2023 – L2 – SA – Q4 – Companies Income Tax

Calculate assessable profit basis periods and capital allowances for Wizzy-Baddo Ltd.

Question

As part of the induction program for the newly recruited staff of your firm of tax consultants, you have been tasked with a presentation on companies’ income tax computation for beginners during the firm’s training session.

You are provided with the following information relating to Wizzy-Baddo Limited, which commenced business on September 1, 2020:

Adjusted Profit:
- Period to December 31, 2020: N6,937,500
- Year ended December 31, 2021: N9,300,500

The following assets were acquired as follows:

Date	Asset	Cost (N)
June 5, 2020	Land and building	5,467,500
July 1, 2020	Motor vehicle	10,000,000
October 15, 2020	Machinery	4,375,000
February 28, 2021	Furniture	3,458,000
May 1, 2021	Delivery van	4,750,000

Required:

a. State the basis periods for assessable profits and qualifying capital expenditure. (5 Marks)

b. Compute the capital allowances.

Answer

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Tags: Basis Periods, Capital allowances, Companies Income Tax, Qualifying Capital Expenditure
Level: Level 2

Topic: Companies Income Tax (CIT)
Series: MAY 2023

FR – Nov 2014 – L2 – Q3 – Conceptual Framework for Financial Reporting

Calculate basis periods and assess tax-related obligations within the Financial Reporting framework.

Question

USMAN Plc.
Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2013

USMAN Plc.
Comparative Statements of Financial Position as at:

Additional information extracted from the company’s records are:

(i) Plant which had a carrying amount of N20,000,000 was sold for N28,000,000
cash and new equipment was purchased for N100million.
(ii) Intangibles valued at N30,000,000 were acquired for cash.
(iii) Borrowings of N20,000,000 were made during the year and received in cash.
(iv) Dividends paid in cash amounted to N100,000,000.

Required:

Prepare Statement of Cash Flows for USMAN Plc for the year ended 31 December 2013
in accordance with IAS7 using direct method.

Answer

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Tags: Basis Periods, Capital allowances, Financial Reporting
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: NOV 2014

TAX – May 2018 – L2 – Q4a – Tax Administration and Enforcement

Calculate assessable profits due to a change in accounting date for Jobi Nig. Enterprises.

Question

John Obi has been running his business in the name of JOBI NIG Enterprises. He is in the business of manufacturing spare parts for vehicles in Aba. He decided to change his accounting date, which had hitherto been September 30. Some years later, the business was discontinued for lack of raw materials which he could not import from war-torn Syria. The adjusted profits of the enterprise are as follows:

Year Ended	Profit (N)
September 30, 2007	840,000
December 31, 2008 (15 months)	840,000
December 31, 2009	630,000
December 31, 2010	540,000
December 31, 2011	480,000

Required:
a. Compute the Assessable Profits for the relevant assessment years using the old basis and new basis. (15 Marks)

Answer

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Tags: Assessable Profits, Basis Periods, Cessation, Change of Accounting Date
Level: Level 2

Topic: Taxation of Specialized Businesses
Series: MAY 2018

TAX – May 2023 – L2 – SA – Q4 – Companies Income Tax

Calculate assessable profit basis periods and capital allowances for Wizzy-Baddo Ltd.

Question

You are provided with the following information relating to Wizzy-Baddo Limited, which commenced business on September 1, 2020:

Adjusted Profit:
- Period to December 31, 2020: N6,937,500
- Year ended December 31, 2021: N9,300,500

The following assets were acquired as follows:

Date	Asset	Cost (N)
June 5, 2020	Land and building	5,467,500
July 1, 2020	Motor vehicle	10,000,000
October 15, 2020	Machinery	4,375,000
February 28, 2021	Furniture	3,458,000
May 1, 2021	Delivery van	4,750,000

Required:

a. State the basis periods for assessable profits and qualifying capital expenditure. (5 Marks)

b. Compute the capital allowances.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basis Periods, Capital allowances, Companies Income Tax, Qualifying Capital Expenditure
Level: Level 2

Topic: Companies Income Tax (CIT)
Series: MAY 2023

FR – Nov 2014 – L2 – Q3 – Conceptual Framework for Financial Reporting

Calculate basis periods and assess tax-related obligations within the Financial Reporting framework.

Question

USMAN Plc.
Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2013

USMAN Plc.
Comparative Statements of Financial Position as at:

Additional information extracted from the company’s records are:

Required:

Prepare Statement of Cash Flows for USMAN Plc for the year ended 31 December 2013
in accordance with IAS7 using direct method.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Basis Periods, Capital allowances, Financial Reporting
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: NOV 2014

TAX – May 2018 – L2 – Q4a – Tax Administration and Enforcement

Calculate assessable profits due to a change in accounting date for Jobi Nig. Enterprises.

Question

Year Ended	Profit (N)
September 30, 2007	840,000
December 31, 2008 (15 months)	840,000
December 31, 2009	630,000
December 31, 2010	540,000
December 31, 2011	480,000

Required:
a. Compute the Assessable Profits for the relevant assessment years using the old basis and new basis. (15 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assessable Profits, Basis Periods, Cessation, Change of Accounting Date
Level: Level 2

Topic: Taxation of Specialized Businesses
Series: MAY 2018

Question Tag: Basis Periods

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TAX – May 2023 – L2 – SA – Q4 – Companies Income Tax

Calculate assessable profit basis periods and capital allowances for Wizzy-Baddo Ltd.

FR – Nov 2014 – L2 – Q3 – Conceptual Framework for Financial Reporting

Calculate basis periods and assess tax-related obligations within the Financial Reporting framework.

TAX – May 2018 – L2 – Q4a – Tax Administration and Enforcement

Calculate assessable profits due to a change in accounting date for Jobi Nig. Enterprises.

TAX – May 2023 – L2 – SA – Q4 – Companies Income Tax

Calculate assessable profit basis periods and capital allowances for Wizzy-Baddo Ltd.

FR – Nov 2014 – L2 – Q3 – Conceptual Framework for Financial Reporting

Calculate basis periods and assess tax-related obligations within the Financial Reporting framework.

TAX – May 2018 – L2 – Q4a – Tax Administration and Enforcement

Calculate assessable profits due to a change in accounting date for Jobi Nig. Enterprises.

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TAX – May 2023 – L2 – SA – Q4 – Companies Income Tax

Calculate assessable profit basis periods and capital allowances for Wizzy-Baddo Ltd.

You're reporting an error for "TAX – May 2023 – L2 – SA – Q4 – Companies Income Tax"

FR – Nov 2014 – L2 – Q3 – Conceptual Framework for Financial Reporting

Calculate basis periods and assess tax-related obligations within the Financial Reporting framework.

You're reporting an error for "FR – Nov 2014 – L2 – Q3 – Conceptual Framework for Financial Reporting"

TAX – May 2018 – L2 – Q4a – Tax Administration and Enforcement

Calculate assessable profits due to a change in accounting date for Jobi Nig. Enterprises.

You're reporting an error for "TAX – May 2018 – L2 – Q4a – Tax Administration and Enforcement"

TAX – May 2023 – L2 – SA – Q4 – Companies Income Tax

Calculate assessable profit basis periods and capital allowances for Wizzy-Baddo Ltd.

You're reporting an error for "TAX – May 2023 – L2 – SA – Q4 – Companies Income Tax"

FR – Nov 2014 – L2 – Q3 – Conceptual Framework for Financial Reporting

Calculate basis periods and assess tax-related obligations within the Financial Reporting framework.

You're reporting an error for "FR – Nov 2014 – L2 – Q3 – Conceptual Framework for Financial Reporting"

TAX – May 2018 – L2 – Q4a – Tax Administration and Enforcement

Calculate assessable profits due to a change in accounting date for Jobi Nig. Enterprises.

You're reporting an error for "TAX – May 2018 – L2 – Q4a – Tax Administration and Enforcement"

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