Taxation 1 (Catch Up CA) (ACCM3203)

Faculty of Economics and Management Science (FEMS)

Semester: Second Semester

Level: 300

Year: 2019

Answers (200 )
UBa; FEMS
CATCHUP C.A. TAXATION I Time allowed: 45mins.
Question 1 (5 Marks)
Jackie received property income of FCFA 5,000,000 but accidently entered the figure on her tax return as FCFA500,000.
Michelle receives property income of FCFA 7,000,000 p.a. and deliberately declares FCFA5,000,000 on her tax return.
Which of the above represents tax avoidance or tax evasion? (5mks)
Question 2 (10 Marks)
In Cameroon, opponents of VAT claim VAT is regressive; supporters of VAT claim it is progressive; the definition
provided by the Cameroon Tax Law says VAT is neither progressive nor regressive.
(a) How can we reconcile these three statements? (8mks)
(c) Comment on the neutrality of vat. (2mks)
Question 3 (15 marks). The computation and recording of the VA T due payment:
The following' figures in Franc CFA are extracted from the books of a trading business registered for VAT for the first
semester of the 2013 financial year.
Periods
Purchases (Excl. VAT) CFAF
Sales (Excl. VAT) CFAF
April
2018
7 000 000
2 800 000
May 2018
4 300 0C0
6 500 000
June 2018
4 000 000
3 800 000
All the above transactions are taxed by VAT.
Also, the business buys and sells both taxable and non-taxable items (partial exemption) and does not separate the two
accounts. Her estimated prorate for deduction is 75%.
Required:
a. Using the schedules below compute the VAT due or VAT credit for each period and present the VAT
declarations and payments. (6mks)
Months
VAT Invoiced
VAT Recoverable
VAT Due/ (VAT Credit)
b. Journalize the declarations and payments, for the months of April, May and June 2018, given that VAT due are
usually paid in cash on the last day of the liability period. (9mks)