Loss carry forward – NBC Institute

TAX – Nov 2020 – L1 – SA – Q1a – Taxation of Partnerships and Sole Proprietorships

Compute the assessable profit or loss for Kayode Oluwa Enterprises for the relevant years.

Question

a. Mr. Kayode Oluwa, a civil engineer, worked for XYZ Nigeria Limited for many years. He retired as the Chief Civil Engineer in 2010. He registered his enterprise under the name of Kayode Oluwa Enterprises and commenced business in 2011.

He appointed you as his tax consultant and submitted his financial records showing the following results:

Year Ended December 31	Amount (N)
2015	1,360,000
2016	(1,900,000)
2017	2,300,000
2018	2,700,000

Required:
Compute the assessable profit/(loss) for the relevant years of assessment. (12 Marks)

Answer

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Tags: Assessable Profit, Financial Records, Loss carry forward, Sole Proprietorship, Tax computation
Level: Level 1

Topic: Taxation of Partnerships and Sole Proprietorships
Series: NOV 2020

PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities

Compute the branch profit tax for Chahuncha Ghana Branch for the year of assessment 2020.

Question

Chahuncha Ghana Branch declares a profit before tax of GH¢6,000,000 in 2020 year of assessment after charging depreciation of GH¢680,000 and a loss of GH¢1,500,000 which was incurred in 2012. The capital allowance for the year amounted to GH¢750,000, yet to be adjusted. The corporate tax rate is 25%.
Required:
Compute the Branch Profit Tax for the 2020 year of assessment.

Answer

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Tags: Branch profit tax, Corporate Tax, Depreciation, Loss carry forward
Level: Level 2

Topic: Corporate Tax Liabilities
Series: AUG 2022

AT – Nov 2020 – L3 – Q2b – Tax planning

Tax implications for a Singaporean investor looking to establish shoe or juice manufacturing companies in Ghana.

Question

Following the government’s commitment to build one factory in each district in Ghana and its desire to ensure food sufficiency through the planting for food and jobs program, an investor from Singapore intends to invest in a shoe manufacturing company to be located at Accra in the Greater Accra Region of Ghana. He also considers starting a juice manufacturing company at Nsawam in the Eastern Region of Ghana in response to the investment drive of the government.

As part of the investment, he intends to incur the following cost and start operations in 2018 on either proposal, which is the shoe manufacturing company or the juice manufacturing company.

Description	Amount (GH¢)
Building	7,200,000
Plant and Machinery	11,700,000
Furniture and Fittings	180,000
Computers	180,000

Additionally, he intends to recruit fresh graduates from the All Nations University College of Ghana. It is further projected that in the first three years, 2018, 2019, and 2020, it will incur GH¢36,000, GH¢32,400, and GH¢18,000 losses, respectively. The investor hopes to start making profit from the year 2021. He intends to borrow at 20% interest from his USA associate, amounting to the equivalent of GH¢100,000,000. The equity he intends to start with is GH¢36,000,000.

Required: As a tax adviser, evaluate the proposed investment by the Singaporean investor and the tax implication on the various activities highlighted in the scenario.

Answer

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Tags: Capital Allowance, Investment, Locational incentives, Loss carry forward, Tax Planning, Thin Capitalization
Level: Level 3

Topic: Tax planning
Series: NOV 2020

AT – Nov 2017 – L3 – Q5b – Business income – Corporate income tax

Computing loss to be carried forward and discussing dividend tax treatment.

Question

Kofas Ltd is a mining company incorporated in Ghana. In the 2016 year of assessment, the company furnished the Ghana Revenue Authority with the following:

Item	GH¢
Revenue	10,000,000
Cost	2,500,000
Gross Profit	7,500,000
Operating expenses	8,100,000
Net Profit	(600,000)

Additional Information:

Foopo Ltd paid a dividend of GH¢50,000 to Kofas Ltd, which was included in the revenue. Kofas Ltd holds 25% of the shares in Foopo Ltd.
The operating expenses of GH¢8,100,000 include the following:
- Filing penalties: GH¢1,000
- Capital work in progress: GH¢200,000
- Depreciation: GH¢100,000
It was agreed with the Ghana Revenue Authority that the capital allowance for the 2016 year of assessment would be GH¢300,000. This allowance is yet to be factored into the computation.

Required:
i) Compute the loss to be carried forward. (5 marks)
ii) Comment on the tax treatment of the dividend paid by Foopo Ltd. (2 marks)
iii) How is unrelieved loss in the mining sector treated? (1 mark)
iv) Under what circumstances will a dividend from petroleum operations be paid to the Government of Ghana? (2 marks)

Answer

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Tags: Dividend, Loss carry forward, Petroleum Tax, Tax
Level: Level 3

Topic: Business income - Corporate income tax
Series: NOV 2017

AT – March 2023 – L3 – Q3d – Business income – Corporate income tax

Discuss how tax laws treat business losses and support business growth through loss carry forward.

Question

ou have been asked to contribute to a public forum on the topic “business losses though not good have a direct effect on business development and growth as they are deductible allowances.”

When businesses make losses, to the extent that the losses are allowable, management becomes happy from the standpoint of taxation while shareholders are not too happy about the losses as these may make it impossible for them to receive dividends.

Required:
How are tax losses treated in businesses and how do the tax laws support the growth of businesses in loss-making?

Answer

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Tags: Business losses, Loss carry forward, Tax Incentives
Level: Level 3

Topic: Business income - Corporate income tax
Series: MAR 2023

TAX – Nov 2020 – L1 – SA – Q1a – Taxation of Partnerships and Sole Proprietorships

Compute the assessable profit or loss for Kayode Oluwa Enterprises for the relevant years.

Question

He appointed you as his tax consultant and submitted his financial records showing the following results:

Year Ended December 31	Amount (N)
2015	1,360,000
2016	(1,900,000)
2017	2,300,000
2018	2,700,000

Required:
Compute the assessable profit/(loss) for the relevant years of assessment. (12 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assessable Profit, Financial Records, Loss carry forward, Sole Proprietorship, Tax computation
Level: Level 1

Topic: Taxation of Partnerships and Sole Proprietorships
Series: NOV 2020

PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities

Compute the branch profit tax for Chahuncha Ghana Branch for the year of assessment 2020.

Question

Answer

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Tags: Branch profit tax, Corporate Tax, Depreciation, Loss carry forward
Level: Level 2

Topic: Corporate Tax Liabilities
Series: AUG 2022

AT – Nov 2020 – L3 – Q2b – Tax planning

Tax implications for a Singaporean investor looking to establish shoe or juice manufacturing companies in Ghana.

Question

As part of the investment, he intends to incur the following cost and start operations in 2018 on either proposal, which is the shoe manufacturing company or the juice manufacturing company.

Description	Amount (GH¢)
Building	7,200,000
Plant and Machinery	11,700,000
Furniture and Fittings	180,000
Computers	180,000

Required: As a tax adviser, evaluate the proposed investment by the Singaporean investor and the tax implication on the various activities highlighted in the scenario.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital Allowance, Investment, Locational incentives, Loss carry forward, Tax Planning, Thin Capitalization
Level: Level 3

Topic: Tax planning
Series: NOV 2020

AT – Nov 2017 – L3 – Q5b – Business income – Corporate income tax

Computing loss to be carried forward and discussing dividend tax treatment.

Question

Kofas Ltd is a mining company incorporated in Ghana. In the 2016 year of assessment, the company furnished the Ghana Revenue Authority with the following:

Item	GH¢
Revenue	10,000,000
Cost	2,500,000
Gross Profit	7,500,000
Operating expenses	8,100,000
Net Profit	(600,000)

Additional Information:

Foopo Ltd paid a dividend of GH¢50,000 to Kofas Ltd, which was included in the revenue. Kofas Ltd holds 25% of the shares in Foopo Ltd.
The operating expenses of GH¢8,100,000 include the following:
- Filing penalties: GH¢1,000
- Capital work in progress: GH¢200,000
- Depreciation: GH¢100,000
It was agreed with the Ghana Revenue Authority that the capital allowance for the 2016 year of assessment would be GH¢300,000. This allowance is yet to be factored into the computation.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Dividend, Loss carry forward, Petroleum Tax, Tax
Level: Level 3

Topic: Business income - Corporate income tax
Series: NOV 2017

AT – March 2023 – L3 – Q3d – Business income – Corporate income tax

Discuss how tax laws treat business losses and support business growth through loss carry forward.

Question

ou have been asked to contribute to a public forum on the topic “business losses though not good have a direct effect on business development and growth as they are deductible allowances.”

Required:
How are tax losses treated in businesses and how do the tax laws support the growth of businesses in loss-making?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business losses, Loss carry forward, Tax Incentives
Level: Level 3

Topic: Business income - Corporate income tax
Series: MAR 2023

Question Tag: Loss carry forward

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TAX – Nov 2020 – L1 – SA – Q1a – Taxation of Partnerships and Sole Proprietorships

Compute the assessable profit or loss for Kayode Oluwa Enterprises for the relevant years.

PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities

Compute the branch profit tax for Chahuncha Ghana Branch for the year of assessment 2020.

AT – Nov 2020 – L3 – Q2b – Tax planning

Tax implications for a Singaporean investor looking to establish shoe or juice manufacturing companies in Ghana.

AT – Nov 2017 – L3 – Q5b – Business income – Corporate income tax

Computing loss to be carried forward and discussing dividend tax treatment.

AT – March 2023 – L3 – Q3d – Business income – Corporate income tax

Discuss how tax laws treat business losses and support business growth through loss carry forward.

TAX – Nov 2020 – L1 – SA – Q1a – Taxation of Partnerships and Sole Proprietorships

Compute the assessable profit or loss for Kayode Oluwa Enterprises for the relevant years.

PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities

Compute the branch profit tax for Chahuncha Ghana Branch for the year of assessment 2020.

AT – Nov 2020 – L3 – Q2b – Tax planning

Tax implications for a Singaporean investor looking to establish shoe or juice manufacturing companies in Ghana.

AT – Nov 2017 – L3 – Q5b – Business income – Corporate income tax

Computing loss to be carried forward and discussing dividend tax treatment.

AT – March 2023 – L3 – Q3d – Business income – Corporate income tax

Discuss how tax laws treat business losses and support business growth through loss carry forward.

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TAX – Nov 2020 – L1 – SA – Q1a – Taxation of Partnerships and Sole Proprietorships

Compute the assessable profit or loss for Kayode Oluwa Enterprises for the relevant years.

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PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities

Compute the branch profit tax for Chahuncha Ghana Branch for the year of assessment 2020.

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AT – Nov 2020 – L3 – Q2b – Tax planning

Tax implications for a Singaporean investor looking to establish shoe or juice manufacturing companies in Ghana.

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AT – Nov 2017 – L3 – Q5b – Business income – Corporate income tax

Computing loss to be carried forward and discussing dividend tax treatment.

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AT – March 2023 – L3 – Q3d – Business income – Corporate income tax

Discuss how tax laws treat business losses and support business growth through loss carry forward.

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TAX – Nov 2020 – L1 – SA – Q1a – Taxation of Partnerships and Sole Proprietorships

Compute the assessable profit or loss for Kayode Oluwa Enterprises for the relevant years.

You're reporting an error for "TAX – Nov 2020 – L1 – SA – Q1a – Taxation of Partnerships and Sole Proprietorships"

PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities

Compute the branch profit tax for Chahuncha Ghana Branch for the year of assessment 2020.

You're reporting an error for "PT – Aug 2022 – L2 – Q5a – Corporate Tax Liabilities"

AT – Nov 2020 – L3 – Q2b – Tax planning

Tax implications for a Singaporean investor looking to establish shoe or juice manufacturing companies in Ghana.

You're reporting an error for "AT – Nov 2020 – L3 – Q2b – Tax planning"

AT – Nov 2017 – L3 – Q5b – Business income – Corporate income tax

Computing loss to be carried forward and discussing dividend tax treatment.

You're reporting an error for "AT – Nov 2017 – L3 – Q5b – Business income – Corporate income tax"

AT – March 2023 – L3 – Q3d – Business income – Corporate income tax

Discuss how tax laws treat business losses and support business growth through loss carry forward.

You're reporting an error for "AT – March 2023 – L3 – Q3d – Business income – Corporate income tax"

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