Taxation 1 (ACCM3203)
Faculty of Economics and Management Science (FEMS)
Semester: Second Semester
Level: 300
Year: 2018
Section A; COST ANALYSIS
QUESTION 1/ 05 MARKS
Indicate the taxation system that best describes the following taxation policies
a). all the male inhabitants of Cameroon are to pay a compulsory levy of 3,500frs to their
local councils
b). all the workers of the Bamenda city council must pay 5% of their gross salaries as income
taxes
c). an import duty of 300,000frs is to be paid on any car that is imported through the Limbe
deep sea port
d). an import duty of 10% is to be paid on the purchase price of all cars imported through the
Douala sea port
e). this tax system imposes a high percentage tax on low income earners than on high income
earners.
QUESTION 2 /5MRKS
Indicate the fiscal minimum tax liability of the following persons
a). quarterly category B business global taxpayers.
b). Annual category D business global taxpayers
c). Annual Category D transporter global taxpayer
e). Quarterly Category B transporter global taxpayers
f). Annual liability for a simplified system business
QUESTION 3/ 20MARKS
The following information is extracted from a partially exempted VAT subject for the month
of June 2018:
• Due to the recurrent nature of the transactions, this business employs the periodic
batch recording system whereby all entries are made on the last day of the month
• Interim prorate used for the recovery of VAT: 65%
• Purchases for the month of June 2018
- Acquisition of light duty truck: 6 558750 FCFA (Incl. vat)
- Acquisition of an office equipment; 1 669 500 FCFA (Incl. vat)
- Purchase of goods by cheque: 57 001 500 FCFA (Incl. VAT)
- Purchase of good by mobile money: 71 550 000 FCFA (Incl.vat)
• Brought forward as at 01/06/2018: account 4440- state, VAT credit 812,500 CAFA
• Sales of goods on credit for the month of June 2018; 144 769 500(incl. VAT)
• Declaration and payment of June VAT by mobile money: 13/07/2018
REQUIRED:
1. Journalese these transactions
2. Summarize the vat declaration for June 2018 (using a table with three columns for
VAT invoiced, VAT recoverable, VAT due/credit)
3. Journalese the vat declaration and payment for June 2018.
QUESTION 4 / 40MARKS
For the financial year ended December 31
st
, 2017, the main profit and loss account of ABC
co. ltd shows the following data
✓ Ordinary activity profit and loss account
• Total debit 374,352,500 frs
• Total credit 508,362,500 frs
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
2
nd
Semester Exam Course: Taxation 1: ACCT306
Credit Value:
Course Lecturers:
Time: Course Status: Date: 2018
Venue: Instruction:
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✓ Extra ordinary activity profit and loss account
• Total debit 92,000,000 frs
• Total credit 47,990,000 frs
From the examination of the profit and loss account, the following observations are made for
calculating the income tax liability of the company:
a) Payment of 320,000frs during the year as fiscal penalties
b) The examination of depreciation schedule reveals that a truck bought on 1
st
jully 2017
for 25,000,000frs with the useful life span of 4 years is depreciated following the reducing
balance method.
c) Royalties paid to foreign and national service providers on account of administrative
and accounting assistance amount to:
• 9,000,000 cfaf to a south African company
• 10,000,000 frs to an accounting firm based in Douala
d) Mr. Emmanou, a commercial senior salaried employee of the company received
2,800,000frs during the year as a flat allowance for business trips. He was reimbursed
1,600,000frs on presentation of justificative vouchers for his annual business trips
e) The company imported an equipment whose purchase price is 16,500,000frs from
Germany and paid 8.5% of the price as brokerage on the purchase
f) Some shareholders put at the disposal of the company funds of which deposits and
withdrawals were as follows
- Balance as at 01/01/2017 5,000,000frs
- Deposit on 01/10/2017 10,000,000frs
- Withdrawal on 31/10/2017 3,000,000frs
The funds are remunerated at the rate of 16%. The BEAC rate of advances of current
year is 11.5%
g) The company organized a swimming gala for her senior staff of which the cost found in
the accounting records of the company is 1,560,000frs
h) The following items appear within sundry expenses
• 7,000,000frs of donation to the Cameroon National Football League one
competition
• 1,200,000frs of gifts to support the wedding of the general manager
i) It was discovered that the sales invoice no 789 of 4,500,000frs was recorded twice
j) The sum of 5,300,000frs of financial revenue is exempted from tax following a recent
fiscal measure
k) The turnover (tax exclusive) of the company stands at 1,250,000,000 frs for the 2017
financial year
l) In computing the December month salary, a power failure impaired the payroll system
which released payable salaries of 18,600,000frs. After a complaint by the affected
salaried workers, it was noticed that the actual amount of salaries was 21,900,000frs
m) One of the shareholders named Mr. Samith holds 9% of the capital while Mrs. Smith
holds 5%. Mrs Smith received as monthly rent of 500,000frs for a heavy equipment put
at the disposal of the company through the 2017 fiscal year
n) Last year’s statistics and tax returns showed a deferred depreciation of 5,400,00frs
Required
a) Carry out the fiscal analysis of the above information (using a table with four columns
for s/n, elements, calculations and amounts, observations)
b) Calculate the taxable net income for the year 2017 fiscal year
c) Calculate the company tax for the 2017 fiscal year
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