- 20 Marks
AT – May 2017 – L3 – Q2 – Business income – Corporate income tax
Compute the chargeable income, explain adjustments, and compute tax payable for a self-employed individual.
Question
Mr. George Amoako, a self-employed single parent with two children attending a private University in Ghana trades as George Amoako Enterprise. He commenced business on 1st January 2016 and submitted the following extracts of his financial statements for the year ended 2016:
| Item | Amount (GH¢) |
|---|---|
| Gross Profit b/d | 20,420 |
| Interest on savings account | 2,020 |
| Gifts received | 1,500 |
| Interest on treasury bills | 790 |
| Auditor’s fees | 800 |
| Depreciation of assets | 1,200 |
| Computers purchased | 2,500 |
| PAYE paid on his personal salary | 450 |
| Employee social security contribution (other staff) | 396 |
| Office rent | 2,400 |
| Personal salary (net) | 7,200 |
| Other staff wages | 4,300 |
| Stationery | 852 |
| Vehicle purchased for CEO’s personal use | 18,000 |
| Transport | 1,300 |
| Net Loss | (14,668) |
| Total | 24,730 |
Required:
a) Determine the Chargeable Income of Mr. George Amoako for 2016 year of assessment. (10 marks)
b) Support your computations with relevant explanations. (5 marks)
c) Compute all Taxes payable. (5 marks)
(Total: 20 marks)
Find Related Questions by Tags, levels, etc.
- Tags: chargeable income, Reliefs, Self-employed, Tax computation, Taxable Income
- Level: Level 3
- Topic: Business income - Corporate income tax
- Series: MAY 2017
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