Advanced-Taxation-accounting-homework-help

FK Insurance Brokers Limited was incorporated on 1 July 2004.  The Managing Director has kept all his transaction vouchers in good order and also maintains proper registers for the premiums received, premiums paid, commissions received, etc.  He has approached you to advise him on the tax payable for the eighteen months ended on 31 December 2005.  From your detailed enquiry you have obtained the following information:

Sh.

Premiums received from clients

Premiums paid to insurance companies

Commissions received (Net)

Rent paid

Salaries and wages

Subscriptions to the Insurance Institute

Withholding Tax Paid

Instalment Tax paid in September 2005

Donations

Annual charges by Commissioner of Insurance

Bank charges

Bank interest earned

Income from Bearer and Treasury Bonds

Depreciation

  Office stationery

  Office maintenance

  Equipment purchases

  Auditors remuneration

  Directors fees

  Entertainment

  Business travel

  Provision for bad debts:

  Specific

  General

  Architects fees on office partitioning

30,000,000

25,000,000

8,500,000

422,440

979,980

6,500

1,500,000

1,125,000

50,000

15,000

3,336

8,972

965,000

223,500

123,400

97,000

92,000

100,000

108,000

180,000

68,000

45,000

50,000

55,000

NB:  Wear and Tear allowances as agreed with the

  Commissioner for Income Tax (for 2005)

232,500

Required:

(a)  Compute the Profit chargeable to Income Tax for the 18 months ended 31 December 2005.

  (12 marks)

(b)  Show tax payable and the dates payable.  (  4 marks)

(c)  Explain why you may not have used all the information provided to you.  (  4 marks)

 

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