- 11 Marks
TAX – Nov 2020 – L1 – SA – Q2a – Companies Income Tax (CIT)
Compute the income tax liability for three companies based on their total profits and provide reasons.
Question
Alhaji Jimoh Abdulahi retired from public service in 2010 and went into business. His friend advised him to incorporate some companies.
The following information in respect of the companies is provided:
| Name of Company | Apex Manufacturing Co. Limited | Zenith Foods Limited | Base Nigeria Limited |
|---|---|---|---|
| Date of Commencement of Business | January 2, 2010 | January 2, 2017 | January 2, 2017 |
| Nature of Business | Manufacturing | Agriculture | Trading |
| Date of Accounts | Year ended December 31, 2018 | Year ended December 31, 2018 | Year ended December 31, 2018 |
| Revenue (N) | 990,400 | 896,400 | 900,500 |
| Total Profit (N) | 384,000 | 421,000 | 396,000 |
Required:
Compute the income tax liability of each of the companies for the relevant assessment year. Give reasons for your computations.
(11 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Agriculture, Income Tax Liability, Manufacturing, Tax computation, Trading
- Level: Level 1
- Topic: Companies Income Tax (CIT)
- Series: NOV 2020
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