F1 Exam Dumps : Financial Reporting

An entity bought a capital item for $110,000 on 1 March 20X4 incurring legal fees at the date of purchase of $2,500.

On 1 May 20X4 additional costs classified as capital expenditure by the tax rules of the country of $25,000 were incurred in respect of the asset. On 1 June 20X4 repairs not classified as capital expenditure were incurred at a cost of $15,000.

The asset was sold for $250,000 on 30 November 20X8 and costs to sell were incurred of $4,300.

Calculate the chargeable gain on the disposal.

Give your answer to the nearest $.

Country A permits the following deductions in an entity's annual corporate income tax return in relation to entertaining expenses and gifts;

1 Employee entertaining up to a value of $150 a head

2 Entertaining of overseas customers.

3 Individual gifts not to exceed $10 in value

Which THREE of the following actions would be regarded as tax evasion?

Entity T operates within several countries, but its country of residence is Country F. In 20X5, Entity T made $8.4 million in Country M. Country M has a flat rate corporation tax of 5.9%.

Country F and Country M operate a double taxation treaty which uses a foreign tax credit system. In Country F, there is a tax of 10% tax on all foreign income.

Taking into account the credit, what is the total tax liability that Entity T owes on its Country M income, in Country F?