- 20 Marks
TAX – Nov 2014 – L2 – Q5 – Companies Income Tax (CIT)
Compute adjusted profit, tax ratios, total profit, and income tax for Kenky Limited.
Question
Kenky Limited, an Austrian company, operates cable undertakings in Nigeria and has significant business in several African countries. The Nigerian Revenue Authority disputed the company’s financial returns, resulting in a Best of Judgement (BoJ) Assessment. Below is an extract from Kenky Limited’s income statement for the fiscal year ending 30 September 2012:
Notes:
- The Federal Inland Revenue Service (FIRS) considers both Nigerian and Austrian operations under specialized business taxation.
- The Austrian authority verified the Adjusted Profit and Depreciation Ratios.
- A donation to Jeje, totaling ₦40,000,000, is part of the overhead expenses.
Requirements: a. Compute the Adjusted Profit for the year. (4 Marks)
b. Determine the Adjusted Profit Ratio and Depreciation Ratio. (4 Marks)
c. Compute the Total Profits and Income Tax payable in Nigeria. (4 Marks)
d. List other business activities, besides cable messages, recognized under specialized business taxation. (3 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Adjusted Profit, Capital Allowance, Depreciation, Income Tax, Specialized Businesses
- Level: Level 2
- Topic: Companies Income Tax (CIT)
- Series: NOV 2014
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