Taxation 1 (ACCM3203)
Faculty of Economics and Management Science (FEMS)
Semester: Second Semester
Level: 300
Year: 2018
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THE UNIVERSITY OF BAMENDA/UNIVERSFFE DE BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES DEPARTMENT OF ACCOUNTING
Second Semester Examination - 2017/2018 Level: Year Two
Course code and title: ACCT305 Taxation I Credit Value: 5 Course Status: C
Course instructors: Mr. NYOBE Joseph Magloire / Mr. DiNGA Octavian
Venue: Upper CCAST Halls Date: 11/07/2018 Time: 10:45 - 13:45
Instructions: Answer all questions
Question 1: I 05 marks
Indicate the taxation systems that best describes the following taxation policies:
a) All the male inhabitants of Cameroon are to pay a compulsory levy of 3 500 CFAF to their local councils.
b) All the workers of the Bamenda city council have to pay 5% of their gross salaries to the council as income
taxes.
c) An import duty of 300 000 CFAF is to be paid on any car that is imported through the Limbe deep seaport.
d) An import duty of 10% is to be paid on the purchase price of all cars imported through the Douala Seaport.
e) This tax system imposes a higher percentage rate of taxation on low incomes than on high incomes
Question 2: / 05 marks
Indicate the fiscal minimum tax liabilities of the following persons:
a) Quarterly Category B business global taxpayers.
b) Annual Category D business global taxpayers.
c) Annual Category D transporter global taxpayers.
d) Quarterly Category B transporter global taxpayers.
e) Annual liability for a simplified system business operator.
Question 3: / 20 marks
The following information is extracted from a partially exempt VAT subject for the month of June 2018:
Due to the recurrent nature of transactions, this business employs the periodic batch recording system
whereby all entries are made on the last day of the month.
Interim prorata used for the recovery of VAT: 65%.
Purchases for the month of June 2018:
- Acquisition of a light-duty truck: 6 558 750 CFAF (Inch VAT).
- Acquisition of an office equipment: 1 669 500 CFAF (Inch VAT).
- Purchases of goods by cheque: 57 001 500 CFAF (Inch VAT).
- Purchases of goods by mobile money: 71 550 000 CFAF (Inch VAT).
Brought forward as at 01/06/2018: account 4449 - State, VAT credit: 812 500 CFAF.
Sales of goods on credit for the month of June 2018: 144 769 500 (Inch VAT).
Declaration and payment of June VAT by mobile money: 13/07/2018.
Required:
1. Journalise these transactions for the business.
2. Summarise the VAT declaration for June 2018 (using a table with three columns for VAT invoiced, VAT
Recoverable, VAT Due/credit).
3. Journalise the VAT declaration and payment for Juno 2018.
Question 4: / 40 marks
For the financial year ended December 31
st
2017, the main profit and loss accounts of ABC Co. Ltd show the
following data:
% Ordinary activity profit and loss account:
Total debit 374 352 500 CFAF
Total credit 508 362 500 CFAF
A Extraordinary activity profit and loss account:
Total debit 92 000 000 CFAF
Total credit 47 990 000 CFAF
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From an examination of the profit and loss accounts, the following observations are made for the purpose of
calculating the income tax liability of this company:
a) Payment of 320 000 CFAF during the year as fiscal penalties.
b) The examination of depreciation schedules reveals that a truck bought on 1
st
July 2017 for 25 000 000 CFAF
with a useful life 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 CFAF to an Accounting Firm based in Douala.
e) Mr Emmanou, a commercial senior salaried employee of the company received 2 800 000 CFAF during the
year as a flat allowance for business trips. He was reimbursed 1 600 000 CFAF on presentation of justificative
vouchers for his annual business trips.
f) The company imported an equipment whose purchase price is 16 500 000 CFAF from Germany and paid
8.5% of the price as brokerage on the purchase.
g) Some shareholders put at the disposal of the company funds of which deposits and withdrawals were as
follows:
- Balance as at 01/01/2017: 5 000 000 CFAF
- Deposit on 01 /10/2017: 10 000 000 CFAF
- Withdrawal on 31.10.2017: 3 000 000 CFAF
These funds are remunerated at the rate of 16%. The BEAC rate for advances of the current year is 11.5%.
h) The company organised a swirnnimg-gara-Tor her senior suiff of which the cost found-in the- accounting
records of the company is 1 560 000 CFAF.
i) The following items appear within sundry expenses:
7 000 000 CFAF of donation to the Cameroon National Football League one competition;
1 200 000 CFAF of gifts to support the wedding of the General Manager.
j) It was discovered that sales invoice no 789 of 4 500 000 CFAF was recorded twice.
k) The sum of 5 300 000 CFAF of financial revenue is exempted from tax following a recent fiscal measure.
l) The turnover (tax exclusive) of the company stands at 1 250 000 000 CFAF for the 2017 financial
year.
m) In computing the December month salary, a power failure impaired the payroll system which released payable
salaries of 18 600 000 CFAF. After a complaint by the affected salaried workers, it was noticed that the actual
amount of salaries was 21 900 000 CFAF.
n) One of the shareholders named Mr. Smith holds 9 % of the capital while Mrs. Smith holds 5 %. Mr. Smith
received a monthly rent of 500 000 F for a heavy equipment put at the disposal of the company through the
2017 fiscal year.
0) Last year’s Statistics and Tax Returns show deferred depreciation of 5 400 000 CFAF
Required:
a) Carry out a fiscal analysis of the above information" (using a table with four volumns for s/n, elements,
calculations and amounts, observations).
b) Calculate the taxable net income of the 2017 fiscal year.
c) Calculate the company tax for the 2017 fiscal year.
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