Tax Accounting (ACCT301)
Faculty of Economics and Management Science (FEMS)
Semester: Second Semester
Level: 300
Year: 2017
Question one: (20marks)
MEGHA Company is an industrial business, whose activities are;
- A: activities liable to VAT
- B: activities not liable to VAT
- C: export of taxable products
You are also given the following information evaluated before VAT:
Activities
Financial Year
2016
Financial Year 2017
(June) remarks
sales
A 161,050,000 25,600,000
B 90,450,000 8,000,000
C 23,200,000 9,900,000
purchases for A and
C exclusively 91,600,000 14,800,000 purchase related to taxable activities
other purchases for
A, B and C 129,100,000 6,030,000
purchases related to both taxable and
exonerated activities
Work required;
1. Calculate the final pro rata for the year 2016. (7 marks)
2. Calculate the VAT to be paid to the state, according to the following assumption: MEGHA
does not discriminate the transaction liable to VAT and those non Liable to VAT. (13marks)
Question two: (15 marks)
A business imported a stock of wine from Spain under the following conditions:
- Purchase price: 600 bottles of which CFAF8,100 per bottle of one liter
- Alcohol concentration: 30
0
per bottle
- Production cost from the importer factory: 5,000,000 F
- Freight: 2,000,000F
- Insurance: 500,000F
- Custom duties 30% of the CIF value
Work required: determine the purchase value of this stock (after excise duty and VAT at
19.25%)
Question three (5 marks)
Mr. Eyango created a provision store at Ntarinkon-Bamenda on July 8
th
2006 and was given
the registration number of the business by the service concerned as 00834569 with the index
key being M. Mr. Eyango was born on the 10
th
of August 1980 in Penja.
Required: the identification number of the business, if it is:
a) A sole proprietorship
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
2
nd
Semester Exam Course: Tax Accounting: ACCT301
Credit Value:
Course Lecturers:
Time: Course Status: Date:
Venue: Instruction:
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b) A single shareholder limited company
Question four (10 marks)
Indicate the tax assessment systems and the minimum annual tax liabilities of the following
persons:
A. Mr. KUM, a sole trader with an annual turnover of about: 18,760,000CFAF
B. Mr. KUM, a sole trader with an annual turnover of about: 8,760,000CFAF
C. A limited liability company with a six-monthly turnover of: 18,760,000FCFA
D. Mr. KUM, a sole trader with a six-monthly turnover of about 28,760,000FCAF
E. A limited liability company with a quarterly turnover of about 28,760,000FCFAF
Question five (20marks)
For the year ended on 31
st
December 2016, ABC Co. Ltd recorded a profit before tax
(accounting profit) of 16,420,000CFAF the fiscal check reveals the following;
I. Sales to Hoga for 5,400,000F were recorded as 4,500,000CFAF.
II. The accountant forecasted and recorded the December month electricity consumption for
1,200,000F while the corresponding bill received in early January 20x10, showed a figure of
800,000F.
III. As at 31
st
December 20x9, ABC Co. Ltd had not received the credit advice from Union bank
for interest to the favor of the business. The receivable interest stood at 850,000F.
IV. The book of account showed salary paid to Miss. Tita for 1,400,000F for the year. The payroll
department is unable to justify that this salary corresponds to effective work.
V. In computing the December month salary, a power failure impaired the payroll system which
released payable salaries of 18,600,000F. after a complaint by the effected salaried workers, it
was noticed that the actual amount of salaries was 21,900,000F
VI. It was discovered that sales invoice no. 789 to Bino amounting to 4,500,000F was recorded
twice.
VII. Annual depreciation recorded on equipment for the year stood at 14,500,000F. only ¾ of this
amount is fiscally deductible
VIII. A recent fiscal measure by the ministry of finance exempts dividends of 3,600,000F earned
from an environmental company which ABC Co. Ltd holds shares.
IX. Purchase invoice 5678 of 2,500,000F was not recorded
X. The tax law makes provision of a tax allowance of 1,000,000F for business which are able to
realize an annual turnover of at least 50,000,000F. ABC Co. Ltd had a turnover of 72,000,000F
for the year 2016.
XI. A flat amount of 2,580,000F was recorded by the account for transport expenses to the benefit
of workers for outstanding allowance. The actual amount spent on outstation for the year as
extracted from the actual invoices reimbursed to workers stands at 1,300,000F
Required: determine the fiscal net income, the company tax on this profit, the company tax
liability for 2016 and the outstanding amount payable my March, if any.
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