What is the amount of consumption tax (CT) payable by Cig Ltd in January 2014?
A.RMB42,000
B.RMB42,900
C.RMB60,000
D.RMB77,100
第1题
Alpha Trading Ltd (Alpha) is a value added tax (VAT) general taxpayer. On 1 January 2014, Alpha lent RMB200,000 to Beta Ltd at an interest rate of 10% per annum.
What is the type and amount of turnover tax which Alpha Trading Ltd will pay on the interest income received for the year 2014?
A.Business tax of RMB1,053
B.Business tax of RMB1,000
C.Value added tax of RMB3,400
D.Value added tax of RMB1,200
第2题
A、$ 504
B、$ 560
C、$ 1,636
D、$ 1,724
第3题
What is the type and amount of turnover tax which Alpha Trading Ltd will pay on the interest income received for the year 2014?
A.Business tax of RMB1,053
B.Business tax of RMB1,000
C.Value added tax of RMB3,400
D.Value added tax of RMB1,200
第4题
Shown below are the financial statements of Woodbank for its most recent two years:
Statements of profit or loss for the year ended 31 March:
The following information is available:
(i) On 1 January 2014, Woodbank purchased the trading assets and operations of Shaw for $50 million and, on the same date, issued additional 10% loan notes to finance the purchase. Shaw was an unincorporated entity and its results (for three months from 1 January 2014 to 31 March 2014) and net assets (including goodwill not subject to any impairment) are included in Woodbank’s financial statements for the year ended 31 March 2014 .There were no other purchases or sales of non-current assets during the year ended 31 March 2014.
(ii) Extracts of the results (for three months) of the previously separate business of Shaw, which are included in Woodbank’s statement of profit or loss for the year ended 31 March 2014, are:
(iii) The following six ratios have been correctly calculated for Woodbank for the year ended 31 March 2013:
Required:
(a) Calculate for the year ended 31 March 2014:
(i) equivalent ratios (all six) to the above for Woodbank based on its reported figures; and
(ii) equivalent ratios to the first FOUR only for Woodbank excluding the effects of the purchase of Shaw.
Note: Assume the capital employed for Shaw is equal to its purchase price of $50 million. (10 marks)
(b) Assess the comparative financial performance and position of Woodbank for the year ended 31 March 2014. Your answer should refer to the effects of the purchase of Shaw. (15 marks)
第5题
Jerome made the following gifts to family members during the tax year 2014–15:
(1) On 28 May 2014, Jerome made a gift of a house valued at £187,000 to his wife. Jerome’s uncle had originally purchased the house on 14 July 1995 for £45,900. The uncle died on 12 June 2004, and the house was inherited by Jerome. On that date, the house was valued at £112,800. Jerome has never occupied the house as his main residence.
(2) On 24 June 2014, Jerome made a gift of his entire 12% holding of 12,000 £1 ordinary shares in Reward Ltd, an unquoted trading company, to his son. The market value of the shares on that date was £98,400. The shares had been purchased on 15 March 2006 for £39,000. On 24 June 2014, the market value of Reward Ltd’s chargeable assets was £540,000, of which £460,000 was in respect of chargeable business assets. Jerome and his son have elected to hold over the gain on this gift of a business asset.
(3) On 7 November 2014, Jerome made a gift of an antique bracelet valued at £12,200 to his granddaughter. The antique bracelet had been purchased on 1 September 2001 for £2,100.
(4) On 29 January 2015, Jerome made a gift of nine acres of land valued at £78,400 to his brother. He had originally purchased ten acres of land on 3 November 2005 for £37,800. The market value of the unsold acre of land as at 29 January 2015 was £33,600. The land has never been used for business purposes.
Required:
(a) Calculate Jerome’s chargeable gains for the tax year 2014–15. Note: You should ignore inheritance tax. (7 marks)
(b) For each of the four recipients of assets (1) to (4) gifted from Jerome, state their respective base cost for capital gains tax purposes. (3 marks)
第6题
In 2013 Stine and Mering entered into a service agreement, by which Mering would provide meals to the employees of Stine. The service fees would be paid on a quarterly basis.
In June 2014, Mering was declared bankrupt by a court which designated a bankruptcy administrator responsible for the liquidation. The bankruptcy administrator found that Mering had failed to pay the rental for 2014. Stine claimed the rental due for the year of 2014 as his credit and requested to offset the meal service fees for the first and second quarters of 2014. Stine also declared dissolution of the leasing agreement between the two parties.
Required:
In accordance with the Enterprise Bankruptcy Law:
(a) State whether Stine’s request to offset the meal service fees was in conformity with the law. (2 marks)
(b) State how to deal with Stine’s request to dissolve the leasing contract. (2 marks)
(c) State what benefit Stine could have if its request to offset was accepted. (2 marks)
第7题
The audit is nearly complete and you are reviewing the audit working papers. The audit senior has brought several matters to your attention:
(a) Darren Co is working on a major contract relating to the construction of a bridge for Flyover Co. Work started in July 2014, and it is estimated that the contract will be completed in September 2015. The contract price is $20 million, and it is estimated that a profit of $5 million will be made on completion of the contract. The full amount of this profit has been included in the statement of profit or loss for the year ended 31 January 2015. Darren Co’s management believes that this accounting treatment is appropriate given that the contract was signed during the financial year, and no problems have arisen in the work carried out so far. (8 marks)
(b) A significant contract was completed in September 2014 for Newbuild Co. This contract related to the construction of a 20-mile highway in a remote area. In November 2014, several large cracks appeared in the road surface after a period of unusually heavy rain, and the road had to be shut for ten weeks while repair work was carried out. Newbuild Co paid for these repairs, but has taken legal action against Darren Co to recover the costs incurred of $40 million. Disclosure on this matter has been made in the notes to the financial statements. Audit evidence, including a written statement from Darren Co’s lawyers, concludes that there is a possibility, but not a probability, of Darren Co having to settle the amount claimed. (6 marks)
(c) For the first time this year, the financial statements are presented as part of an integrated report. Included in the integrated report are several key performance indicators, one of which states that Darren Co’s profit before tax has increased by 20% from the previous year. (6 marks)
Required:
Discuss the implications of the matters described above on the completion of the audit and on the auditor’s report, recommending any further actions which should be taken by the auditor.
Note: The mark allocation is shown next to each of the matters above.
第8题
Mr Lin, a China tax resident, had the following incomes in February 2014.
(1) The payroll information relating to his employment with DSR Ltd for the month of February 2014 is as summarised below:
(2) He is a part-time lecturer at the Shanghai Design Institute. He gave three lectures in February 2014 and he received a lecturing fee of RMB1,000 for each lecture.
(3) He received an insurance compensation of RMB2,000 because of a delayed flight.
(4) During the Spring Festival, his parents gave him RMB10,000 red-packet money.
(5) He won USD1,000 in a lottery when he was on vacation outside China. He paid foreign tax of USD150 on this income.
(6) He had an article published in the January 2014 edition of a journal. The authorship fee of RMB1,000 was paid to him in February 2014.
(7) He is a non-executive director of a listed company. In February 2014, he received a director’s fee of RMB60,000.
(8) He was the only shareholder of Little Ltd. He sold all of his shares in this company for RMB1,000,000 on 28 February 2014, when the net asset value of Little Ltd was RMB800,000. The purchase cost of the shares was RMB400,000.
Required:
Calculate the individual income tax (IIT) payable by Mr Lin on each of his items of income ((1) to (8)) for February 2014. State clearly if any item is tax exempt or not taxable.
Note: Ignore value added tax and business tax.
第9题
Section B – TWO questions ONLY to be attempted
(a) You are an audit manager in Rose & Co, responsible for the audit of Cooper Co. You are reviewing the audit working papers relating to the financial year ended 31 January 2014. Cooper Co is a manufacturer of chemicals used in the agricultural industry. The draft financial statements recognise profit for the year to 31 January 2014 of $15 million (2013 – $20 million) and total assets of $240 million (2013 – $230 million).
The audit senior, Max Turner, has brought several matters to your attention:
(i) Cooper Co’s factories are recognised within property, plant and equipment at a carrying value of $60 million. Half of the factories produce a chemical which is used in farm animal feed. Recently the government has introduced a regulation stipulating that the chemical is phased out over the next three years. Sales of the chemical are still buoyant, however, and are projected to account for 45% of Cooper Co’s revenue for the year ending 31 January 2015. Cooper Co has started to research a replacement chemical which is allowed under the new regulation, and has spent $1 million on a feasibility study into the development of this chemical. (8 marks)
(ii) In October 2013, Cooper Co’s finance director, Hannah Osbourne, purchased a car from the company. The carrying value of the car at the date of its disposal to Hannah was $50,000, and its market value was $75,000. Cooper Co raised an invoice for $50,000 in respect of the disposal, which is still outstanding for payment. (7 marks)
Required:
Comment on the matters to be considered and explain the audit evidence you should expect to find during your review of the audit working papers in respect of each of the issues described above.
Note: The split of the mark allocation is shown against each of the issues above.
(b) Max noticed that a section of the audit file had not been completed on the previous year’s audit. The incomplete section relates to expenditure incurred in the year to 31 January 2013, which appears not to have been audited at all in the prior year. The expenditure of $1·2 million was incurred in the development of an internally generated brand name. The amount was capitalised as an intangible asset at 31 January 2013, and that amount is still recognised at 31 January 2014.
Required:
Explain the implications of this matter for the completion of the audit, and any other professional issues raised, recommending any actions to be taken by the auditor. (5 marks)
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