- 5 Marks
AT – May 2017 – L3 – Q5b – Business income – Corporate income tax
Calculate the royalty payable and compute the corporate tax payable by a mining company based on provided financial data.
Question
b) AB Ltd is a mining company and has the following set of data relating to the 2016 year of assessment:
| Item | Amount (GH¢) |
|---|---|
| Revenue | 5,000,000 |
| Cost of operation | 3,000,000 |
| Chargeable income | 2,000,000 |
From the above, the following came to light:
- Capital allowance of GH¢500,000 was added to the cost.
- Penalty of GH¢100,000 was imposed by the Minerals Commission for failure to follow standard operating guidelines.
- Loss from operation amounting to GH¢50,000 recorded in 2010 was added to the cost above.
- According to the accountant, the company is entitled to carryover its losses.
Required:
i) Calculate the Royalty payable, if any. (2.5 marks)
ii) Compute the corporate tax payable by AB Ltd. (2.5 marks)
(Total: 5 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Capital Allowance, Corporate Tax, Mining, Royalty, Tax computations
- Level: Level 3
- Topic: Business income - Corporate income tax
- Series: MAY 2017
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