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(ii) Following on from your answer to (i), evaluate the two purchase proposals, and advise Bill and Ben
which course of action will result in the highest amount of after tax cash being received by the
shareholders if the disposal takes place on 31 March 2006. (4 marks)
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更多 “ (ii) Following on from your answer to (i), evaluate the two purchase proposals, and advise Bill and Benwhich course of action will result in the highest amount of after tax cash being received by theshareholders if the disposal takes place on 31 March 2006. (4 marks) ” 相关考题
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I’m worried about the valuables I carry with me will be stolen.A.You are suggested to deposit your valuables in the safety deposit box in this hotel.B.I advise you to deposit your valuables in the safety box of the bank.C.I advise you to open an account to deposit cash in the bank.D.You may follow my suggestion to put your valuables in a safe box in your hom
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(c) (i) State the date by which Thai Curry Ltd’s self-assessment corporation tax return for the year ended30 September 2005 should be submitted, and advise the company of the penalties that will be due ifthe return is not submitted until 31 May 2007. (3 marks)(ii) State the date by which Thai Curry Ltd’s corporation tax liability for the year ended 30 September 2005should be paid, and advise the company of the interest that will be due if the liability is not paid until31 May 2007. (3 marks)
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(ii) Illustrate the benefit of revising the corporate structure by calculating the corporation tax (CT) payablefor the year ended 31 March 2006, on the assumptions that:(1) no action is taken; and(2) an amended structure as recommended in (i) above is implemented from 1 June 2005. (3 marks)
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For this part, assume today’s date is 15 August 2005.5 (a) Donald is aged 22, single, and about to finish his university education. He has plans to start up a business sellingcomputer games, and intends to start trading on 1 April 2006, making up accounts to 31 March annually.He believes that his business will generate cash (equal to taxable profits) of ￡47,500 in the first year. Heoriginally intended to operate as a sole trader, but he has recently discovered that as an alternative, he couldoperate through a company. He has been advised that if this is the case, he can take a maximum gross salaryof ￡42,648 out of the company.Required:(i) Advise Donald on the income tax (IT), national insurance (NIC) and corporation tax (CT) liabilities hewill incur for the year ended 31 March 2007 trading under each of the two alternative businessstructures (sole trade/company). Your advice should be supported by calculations of disposable incomefor both alternatives assuming that in the company case, he draws the maximum salary stated.(7 marks)
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(ii) Assuming that Donald operates through a company, advise Donald on the corporation tax (CT) thatwould be payable for the year ended 31 March 2007 if he pays himself a gross salary of ￡31,000, plusa net dividend of ￡10,000, instead of a gross salary of ￡42,648. (4 marks)
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6 Alasdair, aged 42, is single. He is considering investing in property, as he has heard that this represents a goodinvestment. In order to raise the funds to buy the property, he wants to extract cash from his personal company, BeezerLimited, whose year end is 31 December.Beezer Limited was formed on 1 May 1998 with ￡1,000 of capital issued as 1,000 ￡1 ordinary shares, and tradeduntil 1 January 2005 when Alasdair sold the trade and related assets. The company’s only asset is cash of￡120,000. Alasdair wants to extract this cash from the company with the minimum amount of tax payable. He isconsidering either, paying himself a dividend of ￡120,000, on 31 March 2006, after which the company would haveno assets and be wound up or, leaving the cash in the company and then liquidating the company. Costs of liquidationof ￡5,000 would then be incurred.Since Beezer Limited ceased trading, Alasdair has been taken on as a partner at a marketing firm, Gallus Co. Heestimates his profit share for the year of assessment 2005/06 will be ￡30,000. He has not made any capital disposalsin the current tax year.Alasdair wishes to reinvest the cash extracted from Beezer Limited in property but is not sure whether he should investdirectly in residential or commercial property, or do so via some form. of collective investment. He is aware that Gallus Co are looking to rent a new warehouse which could be bought for ￡200,000. Alasdair thinks that he may be ableto buy the warehouse himself and lease it to his firm, but only if he can borrow the additional money to buy theproperty.Alasdair has a 25% shareholding in another company, Glaikit Limited, whose year end is 31 March. The remainingshares in this company are held by his friend, Gill. Alasdair is considering borrowing ￡15,000 from Glaikit Limitedon 1 January 2006. He does not intend to pay any interest on the loan, which is likely to be written off some timein 2007. Alasdair does not have any connection with Glaikit Limited other than his shareholding.Required:(a) Advise Alasdair whether or not a dividend payment will result in a higher after-tax cash sum than theliquidation of Beezer Limited. Assume that either the dividend would be paid on 31 March 2006 or theliquidation would take place on 31 March 2006. (9 marks)Assume that Beezer Limited has always paid corporation tax at or above the small companies rate of 19%and that the tax rates and allowances for 2004/05 apply throughout this part.
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(c) Advise Alan on the proposed disposal of the shares in Mobile Ltd. Your answer should include calculationsof the potential capital gain, and explain any options available to Alan to reduce this tax liability. (7 marks)
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(b) Mabel has two objectives when making the gifts to Bruce and Padma:(1) To pay no tax on any gift in her lifetime; and(2) To reduce the eventual liability to inheritance tax on her death.Advise Mabel which item to gift to Bruce and to Padma in order to satisfy her objectives. Give reasons foryour advice.Your advice should include a computation of the inheritance tax saved as a result of the two gifts, on theassumption that Mabel dies on 30 June 2011. (10 marks)
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(ii) Advise Benny of the amount of tax he could save by delaying the sale of the shares by 30 days. For thepurposes of this part, you may assume that the benefit in respect of the furnished flat is ￡11,800 peryear. (3 marks)
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3 On 1 January 2007 Dovedale Ltd, a company with no subsidiaries, intends to purchase 65% of the ordinary sharecapital of Hira Ltd from Belgrove Ltd. Belgrove Ltd currently owns 100% of the share capital of Hira Ltd and has noother subsidiaries. All three companies have their head offices in the UK and are UK resident.Hira Ltd had trading losses brought forward, as at 1 April 2006, of ￡18,600 and no income or gains against whichto offset losses in the year ended 31 March 2006. In the year ending 31 March 2007 the company expects to makefurther tax adjusted trading losses of ￡55,000 before deduction of capital allowances, and to have no other incomeor gains. The tax written down value of Hira Ltd’s plant and machinery as at 31 March 2006 was ￡96,000 andthere will be no fixed asset additions or disposals in the year ending 31 March 2007. In the year ending 31 March2008 a small tax adjusted trading loss is anticipated. Hira Ltd will surrender the maximum possible trading lossesto Belgrove Ltd and Dovedale Ltd.The tax adjusted trading profit of Dovedale Ltd for the year ending 31 March 2007 is expected to be ￡875,000 andto continue at this level in the future. The profits chargeable to corporation tax of Belgrove Ltd are expected to be￡38,000 for the year ending 31 March 2007 and to increase in the future.On 1 February 2007 Dovedale Ltd will sell a small office building to Hira Ltd for its market value of ￡234,000.Dovedale Ltd purchased the building in March 2005 for ￡210,000. In October 2004 Dovedale Ltd sold a factoryfor ￡277,450 making a capital gain of ￡84,217. A claim was made to roll over the gain on the sale of the factoryagainst the acquisition cost of the office building.On 1 April 2007 Dovedale Ltd intends to acquire the whole of the ordinary share capital of Atapo Inc, an unquotedcompany resident in the country of Morovia. Atapo Inc sells components to Dovedale Ltd as well as to othercompanies in Morovia and around the world.It is estimated that Atapo Inc will make a profit before tax of ￡160,000 in the year ending 31 March 2008 and willpay a dividend to Dovedale Ltd of ￡105,000. It can be assumed that Atapo Inc’s taxable profits are equal to its profitbefore tax. The rate of corporation tax in Morovia is 9%. There is a withholding tax of 3% on dividends paid tonon-Morovian resident shareholders. There is no double tax agreement between the UK and Morovia.Required:(a) Advise Belgrove Ltd of any capital gains that may arise as a result of the sale of the shares in Hira Ltd. Youare not required to calculate any capital gains in this part of the question. (4 marks)
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(ii) Compute the annual income tax saving from your recommendation in (i) above as compared with thesituation where Cindy retains both the property and the shares. Identify any other tax implicationsarising from your recommendation. Your answer should consider all relevant taxes. (3 marks)
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(ii) Assuming the relief in (i) is available, advise Sharon on the maximum amount of cash she could receiveon incorporation, without triggering a capital gains tax (CGT) liability. (3 marks)
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4 (a) For this part, assume today’s date is 1 March 2006.Bill and Ben each own 50% of the ordinary share capital in Flower Limited, an unquoted UK trading companythat makes electronic toys. Flower Limited was incorporated on 1 August 2005 with 1,000 ￡1 ordinary shares,and commenced trading on the same day. The business has been successful, and the company has accumulateda large cash balance of ￡180,000, which is to be used to purchase a new factory. However, Bill and Ben havereceived an offer from a rival company, which they are considering. The offer provides Bill and Ben with twoalternative methods of payment for the purchase of their shares:(i) ￡480,000 for the company, inclusive of the ￡180,000 cash balance.(ii) ￡300,000 for the company assuming the cash available for the factory purchase is extracted prior to sale.Bill and Ben each currently receive a gross salary of ￡3,750 per month from Flower Limited. Part of the offerterms is that Bill and Ben would be retained as employees of the company on the same salary.Neither Bill nor Ben has used any of their capital gains tax annual exemption for the tax year 2005/06.Required:(i) Calculate which of the following means of extracting the ￡180,000 from Flower Limited on 31 March2006 will result in the highest after tax cash amount for Bill and Ben:(1) payment of a dividend, or(2) payment of a salary bonus.You are not required to consider the corporation tax (CT) implications for Flower Limited in youranswer. (5 marks)
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(ii) Calculate the corporation tax (CT) payable by Tay Limited for the year ended 31 March 2006, takingadvantage of all available reliefs. (3 marks)
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(ii) Advise Andrew of the tax implications arising from the disposal of the 7% Government Stock, clearlyidentifying the tax year in which any liability will arise and how it will be paid. (3 marks)
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(b) (i) Advise Andrew of the income tax (IT) and capital gains tax (CGT) reliefs available on his investment inthe ordinary share capital of Scalar Limited, together with any conditions which need to be satisfied.Your answer should clearly identify any steps that should be taken by Andrew and the other investorsto obtain the maximum relief. (13 marks)
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(ii) Advise Clifford of the capital gains tax implications of the alternative of selling the Oxford house andgarden by means of two separate disposals as proposed. Calculations are not required for this part ofthe question. (3 marks)
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3 Palm plc recently acquired 100% of the ordinary share capital of Nikau Ltd from Facet Ltd. Palm plc intends to useNikau Ltd to develop a new product range, under the name ‘Project Sabal’. Nikau Ltd owns shares in a non-UKresident company, Date Inc.The following information has been extracted from client files and from a meeting with the Finance Director of Palmplc.Palm plc:– Has more than 40 wholly owned subsidiaries such that all group companies pay corporation tax at 30%.– All group companies prepare accounts to 31 March.– Acquired Nikau Ltd on 1 November 2007 from Facet Ltd, an unrelated company.Nikau Ltd:– UK resident company that manufactures domestic electronic appliances for sale in the European Union (EU).– Large enterprise for the purposes of the enhanced relief available for research and development expenditure.– Trading losses brought forward as at 1 April 2007 of ￡195,700.– Budgeted taxable trading profit of ￡360,000 for the year ending 31 March 2008 before taking account of ‘ProjectSabal’.– Dividend income of ￡38,200 will be received in the year ending 31 March 2008 in respect of the shares in DateInc.‘Project Sabal’:– Development of a range of electronic appliances, for sale in North America.– Project Sabal will represent a significant advance in the technology of domestic appliances.– Nikau Ltd will spend ￡70,000 on staffing costs and consumables researching and developing the necessarytechnology between now and 31 March 2008. Further costs will be incurred in the following year.– Sales to North America will commence in 2009 and are expected to generate significant profits from that year.Shares in Date Inc:– Nikau Ltd owns 35% of the ordinary share capital of Date Inc.– The shares were purchased from Facet Ltd on 1 June 2003 for their market value of ￡338,000.– The sale was a no gain, no loss transfer for the purposes of corporation tax.– Facet Ltd purchased the shares in Date Inc on 1 March 1994 for ￡137,000.Date Inc:– A controlled foreign company resident in the country of Palladia.– Annual chargeable profits arising out of property investment activities are approximately ￡120,000, of whichapproximately ￡115,000 is distributed to its shareholders each year.The tax system in Palladia:– No taxes on income or capital profits.– 4% withholding tax on dividends paid to shareholders resident outside Palladia.Required:(a) Prepare detailed explanatory notes, including relevant supporting calculations, on the effect of the followingissues on the amount of corporation tax payable by Nikau Ltd for the year ending 31 March 2008.(i) The costs of developing ‘Project Sabal’ and the significant commercial changes to the company’sactivities arising out of its implementation. (8 marks)
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4 Coral is the owner and managing director of Reef Ltd. She is considering the manner in which she will make her firstpension contributions. In November 2007 she inherited her mother’s house in the country of Kalania.The following information has been extracted from client files and from telephone conversations with Coral.Coral:– 1972 – Born in the country of Kalania. Her father, who died in 2002, was domiciled in Kalania.– 1999 – Moved to the UK and has lived and worked here since then.– 2001 – Subscribed for 100% of the ordinary share capital of Reef Ltd.– Intends to sell Reef Ltd and return to live in the country of Kalania in 2012.– No income apart from that received from Reef Ltd.Reef Ltd:– A UK resident company with annual profits chargeable to corporation tax of approximately ￡70,000.– Four employees including Coral.– Provides scuba diving lessons to members of the public.Payments from Reef Ltd to Coral in 2007/08:– Director’s fees of ￡460 per month.– Dividends paid of ￡14,250 in June 2007 and ￡14,250 in September 2007.Pension contributions:– Coral has not so far made any pension contributions in the tax year 2007/08 but wishes to make gross pensioncontributions of ￡9,000.– The contributions are to be made by Reef Ltd or Coral or a combination of the two in such a way as to minimisethe total after tax cost.– Any contributions made by Coral will be funded by an additional dividend from Reef Ltd.House in the country of Kalania:– Beachfront property with potential rental income of ￡550 per month after deduction of allowable expenditure.– Coral will use it for holidays for two months each year.The tax system in the country of Kalania:– No capital gains tax or inheritance tax.– Income tax at 8% on income arising in the country of Kalania.– No double tax treaty with the UK.Required:(a) With the objective of minimising the total after tax cost, advise Coral as to whether the gross pensioncontributions of ￡9,000 should be made:– wholly by Reef Ltd; or– by Coral to the extent that they are tax allowable with the balance made by Reef Ltd.Your answer should include supporting calculations where necessary. (9 marks)
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(ii) On 1 July 2006 Petrie introduced a 10-year warranty on all sales of its entire range of stainless steelcookware. Sales of stainless steel cookware for the year ended 31 March 2007 totalled $18·2 million. Thenotes to the financial statements disclose the following:‘Since 1 July 2006, the company’s stainless steel cookware is guaranteed to be free from defects inmaterials and workmanship under normal household use within a 10-year guarantee period. No provisionhas been recognised as the amount of the obligation cannot be measured with sufficient reliability.’(4 marks)Your auditor’s report on the financial statements for the year ended 31 March 2006 was unmodified.Required:Identify and comment on the implications of these two matters for your auditor’s report on the financialstatements of Petrie Co for the year ended 31 March 2007.NOTE: The mark allocation is shown against each of the matters above.
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Which of the following operations need NOT to be entered on the Oil Record Book Part I? I、Disposal of oil residues. II、 Internal transfer of fuel oilA.I onlyB.II onlyC.both I and IID.neither I nor II
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(a) The following information relates to Crosswire a publicly listed company.Summarised statements of financial position as at:The following information is available:(i) During the year to 30 September 2009, Crosswire embarked on a replacement and expansion programme for its non-current assets. The details of this programme are:On 1 October 2008 Crosswire acquired a platinum mine at a cost of $5 million. A condition of mining theplatinum is a requirement to landscape the mining site at the end of its estimated life of ten years. Thepresent value of this cost at the date of the purchase was calculated at $3 million (in addition to thepurchase price of the mine of $5 million).Also on 1 October 2008 Crosswire revalued its freehold land for the first time. The credit in the revaluationreserve is the net amount of the revaluation after a transfer to deferred tax on the gain. The tax rate applicable to Crosswire for deferred tax is 20% per annum.On 1 April 2009 Crosswire took out a finance lease for some new plant. The fair value of the plant was$10 million. The lease agreement provided for an initial payment on 1 April 2009 of $2·4 million followedby eight six-monthly payments of $1·2 million commencing 30 September 2009.Plant disposed of during the year had a carrying amount of $500,000 and was sold for $1·2 million. Theremaining movement on the property, plant and equipment, after charging depreciation of $3 million, wasthe cost of replacing plant.(ii) From 1 October 2008 to 31 March 2009 a further $500,000 was spent completing the developmentproject at which date marketing and production started. The sales of the new product proved disappointingand on 30 September 2009 the development costs were written down to $1 million via an impairmentcharge.(iii) During the year ended 30 September 2009, $4 million of the 10% convertible loan notes matured. Theloan note holders had the option of redemption at par in cash or to exchange them for equity shares on thebasis of 20 new shares for each $100 of loan notes. 75% of the loan-note holders chose the equity option.Ignore any effect of this on the other equity reserve.All the above items have been treated correctly according to International Financial Reporting Standards.(iv) The finance costs are made up of:Required:(i) Prepare a statement of the movements in the carrying amount of Crosswire’s non-current assets for theyear ended 30 September 2009; (9 marks)(ii) Calculate the amounts that would appear under the headings of ‘cash flows from investing activities’and ‘cash flows from financing activities’ in the statement of cash flows for Crosswire for the year ended30 September 2009.Note: Crosswire includes finance costs paid as a financing activity. (8 marks)(b) A substantial shareholder has written to the directors of Crosswire expressing particular concern over thedeterioration of the company’s return on capital employed (ROCE)Required:Calculate Crosswire’s ROCE for the two years ended 30 September 2008 and 2009 and comment on theapparent cause of its deterioration.Note: ROCE should be taken as profit before interest on long-term borrowings and tax as a percentage of equity plus loan notes and finance lease obligations (at the year end). (8 marks)
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February18th
Ruth Walter
2921 Cypress Lane
Smith field，UT 00375
Dear Ms．Walter，
It has come to our attention that you have failed to remit payment for service provided during the two billing periods of 7／15—8／14 and 9／15—10／14 last year．
Our records indicate that multiple bills for these periods have been sent to your address with out reply．At this point．we are regrettably required to take stronger measures．If by April 15 we have not received payment in full，including all late fees charged，we will be forced to terminate service to your residence．
For further information about this action，or to verify the amount of your outstanding balance，please call our Customer Service Center at l—888—555—3802。or write to the following address：
Accounts Payable Division
Northern Utah Gas&Power
55755 State Highway 1 6
Logan，UT 00378
February 27th
Accounts Payable Division
Northern Utah Gas&Power
55755 State Highway l 6
Logan，UT 00378
Service representative，
I recently received a notification of outstanding charges on my account．I am very confused and distressed by the situation outlined in your letter．
First of all，I am certain that I paid for all services during the two billing period in question．The payments were on time and for the correct amount．I used your company’S automated telephone billing system and paid with my credit card．I am including transaction receipts from my credit card company that list these payments and the dates on which they were processed by your company.
After I had paid then，I did receive multiple bills for the periods 7／15—8／14 and 9／15—10／14 as stated in your letter．I tried repeatedly to report this error to your company via the customer service email system，but I never received a response．I am also attaching copies of these emails for your review．
These documents clearly show that I have made all payments in a timely fashion，and I hope they will help you resolve this situation．If you have any more questions for me，please contact me by phone(555-7690)or email(rwalt79@mzmail．com)．
Ruth Walter
What does the first letter require Ms．Walter to do?A.Call the Customer Service Center
B.Sent payment to the utilities firm
C.Review two bills from last year
D.Verify her account balance
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资料：To：Sherry Linton
From：Melanie Jury
Date：15 July
Subject：Purchase orders
Please note that a purchase order （copy attached） must be completed for all purchases over 50 USD.
Complete purchase orders should be passed to Christine Hantke to agree terms of payment with the supplier, and then sent to the Manchester office for final approval.
Purchase orders under 50 USD can be paid for from the petty cash account.
Many thanks for your co-operation.
MJ
Which of the following is NOT a step that should be completed before making a purchase over 50 USD?A.Getting the approval from the Manchester office.
B.Passing the order to Christine Hantke.
C.Using the petty cash account.
D.Completing a purchase order.
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We have received with thanks your fax of March 30 and （） to reply as follows.A、pleasedB、be pleasedC、are pleasedD、being pleased
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问答题Task II (20 marks) Directions:Many nations’ serious school problems nowadays result from the students’ attitude. What causes these problems? What’s your opinion to deal with these problems? State your opinion in no less than about 160 words, and write it on the Answer Sheet.
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问答题Practice 3 ● Your manager is considering whether to purchase or to rent a new company premise. He has asked you to write a report concerning this. ● Write a report for your manager, including the following information: ● what you know about the premise, ● why it is good for you to take the relevant action, ● how your company would benefit from it. ● Write 200-250 words.
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