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Financial Reporting Questions 76–80 (page: 17)

XYZ operates in Country P where the tax rules state entertaining costs and accounting depreciation are disallowable for tax purposes.
In year ending 31 March 20X4, XYZ made an accounting profit of $240,000. Profit included $14,500 of entertaining costs and $5,000 of income exempt from taxation. XYZ has plant and machinery with accounting depreciation amounting to $26,300 and tax depreciation amounting to $35,200.
Calculate the taxable profit for the year ended 31 March 20X4.

RST operates in Country X where the tax rules state entertaining costs and accounting depreciation are disallowable for tax purposes.
In year ending 31 May 20X4, XYZ made an accounting profit of $480,000. Profit included $16,300 of entertaining costs and $15,150 of income exempt from taxation. XYZ has plant and machinery with accounting depreciation amounting to $24,200 and tax depreciation amounting to $45,200.

Calculate the tax charge for the year ended 31 May 20X4 assuming all profits are taxed at 25%.

HOTSPOT (Drag and Drop is not supported)
FG purchased 40% of the equity shares of QR and exerted significant influence over the board of the directors.
QR will be classified as____of FG.

HOTSPOT (Drag and Drop is not supported)
What is the correct classification of a 90-day government bond?

In Country X, trading losses in any year can be carried back and set off against trading profits in the previous year, with any unrelieved losses carried forward to set against the first available trade profits in future years.
GH had the following taxable profits and losses in years 20X1 to 20X4:



What are the taxable profits for 20X4, assuming the most efficient use of the loss is made?