SECTION A Attempt all questions in this section. 1. Shepherd Enterprises Limited ("the Company") is a limited liability

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: Section A Attempt All Questions In This Section 1 Shepherd Enterprises Limited The Company Is A Limited Liability 1 (39.62 KiB) Viewed 38 times

i)
Trinidad Corp Tax- 25% on the first TT$1,000,000 of a company's chargeable profits and chargeable short term capital gains and 30% thereafter
Business Levy- 0.6%
Green Fund Levy- 0.3%

: Section A Attempt All Questions In This Section 1 Shepherd Enterprises Limited The Company Is A Limited Liability 2 (57.94 KiB) Viewed 38 times

: Section A Attempt All Questions In This Section 1 Shepherd Enterprises Limited The Company Is A Limited Liability 3 (17.31 KiB) Viewed 38 times

SECTION A Attempt all questions in this section. 1. Shepherd Enterprises Limited ("the Company") is a limited liability company incorporated in Trinidad and Tobago in March 2015 and controlled within Trinidad and Tobago. It is engaged in the business of the retail of electrical appliances. Its income statement for the 12-month period ended 31st December, 2021 is as follows: INCOME STATEMENT $ $ 3,000,000 Gross Sales Cost of Sales 1.350.000 Gross Profit 1,650,000 Other Income 450.000 2,100,000 Expenses: Salaries and Wages 500,000 Entertainment 60,000 Advertising 200,000 Depreciation 150,000 Legal and Professional Fees 90,000 Interest 50,000 Donations 50,000 Royalty 50,000 Sponsorships 100,000 Bad Debts 50,000 Foreign Travel 100,000 Total Expenses Net Profit 1,400,000 700,000
page 3 The following notes are given to its income statement: a. Other income comprises dividends it receives from an investment in a company resident in Jamaica of $150,000 and a company resident in Bahamas of $120,000. The balance relates to the gain on the disposal of fixed assets which were acquired on 1 March, 2020 and disposed on the 1st May, 2021. The disposal proceeds were $200,000 b. The opening wear and tear pool balances: Class A $250,000 Class B $500,000 Class C $300,000 There were no additions of any qualifying fixed assets during the year and the disposals of fixed assets referred to in (a) above relates to class B assets. c. Legal and Professional Fees include the sum of $40,000 which relates to the fees paid to an accounting firm for representation at a matter before objections at the Board of Inland Revenue; the remainder relates to the legal fees incurred in relation to debt collection on outstanding trade receivables. d. Advertising was all business related and all done locally. e. Interest comprises the sum of $20,000 relating to the occurrence of interest and penalty on late payment of PAYE. The balance relates to accrued interest on a loan used to acquire additional stock. The amount of interest actually paid on the loan was $25,000. f. Donations relate to various donations to approved charities under deed of covenant. The stamp duty associated with these deeds of covenant was paid and the deeds duly stamped on the 20th December, 2021. g. Sponsorships refer to the sponsorship of a local football club of $75,000 and the remainder relates to the sponsorship of a local fashion show highlighting local designers during fashion week in April 2021. h. Bad Debts include the amount of $15,000 which relates to a specific debt where efforts have been made to recover the sum and the age of the debt is 2 years. The balance relates to a general provision. i. Foreign Travel all relate to the expenditure incurred by the Managing Director, Scott Shepherd on his annual vacation with his family. J. Entertainment relates to expenses incurred in hosting client appreciation events throughout the year. k. The company has made quarterly payments for the year of income 2021 of $40,000 per quarter for Corporation Tax and $3,000 per quarter with respect to Green Fund Levy. Required: i) For the 2021 year of income calculate the company's Corporation Tax, Business Levy and Green Fund Levy Liabilities specifying what amounts are payable/refundable for the respective tax types.
ii) There is a proposal by Director Bobby Shepherd for the Company to change its year end to the 31st September. This he has indicated is to seek harmonisation of the year end for all companies within the Shepherd Group. You are required to prepare a note to Bobby Shepherd in which you are to indicate the tax considerations relating to a change in the accounting year end date. (5 marks)