Below is the income statement of Global Feed Manufacturing Company Limited, located in Wassa in the
Western Region of Ghana. The statement covers the year ended 31/12/2012.
GH¢000 GH¢ 000
Gross Profit 618,750
Rent Income 156, 250
Other Income 25,000 800,000
Less: Expenses
Management Salaries 43,750
Staff Salaries 21, 250
Equipment 18,125
Depreciation 7,500
Casual Labour 10,500
Office Rent 9,000
Vehicle Repairs 19,500
Business Promotions 5,250
Donations 11,375
Repairs of Factory Premises 28,500
Office Expenses 22,500
Bad Debts 73,750
Advertisements 1,500 272,500
Net Profit 527,500
Notes to the Accounts:
1. Other income includes profit on disposal of fixtures and fittings amounting to GH¢15,000,000.
2. Casual Labour is made up of Factory Hands and Wages of employees in Director’s Private Property
amounting to GH¢6,250,000 and GH¢4,250,000 respectively.
3. Vehicle Repairs includes cost of new engine of GH¢4,500,000, fuel & lubricants of GH¢8,750,000
and Tyres and Tubes of GH¢6,250,000.
4. Donations consist of the following: Kotoko Football Club GH¢7,500,000, National Trust Fund
GH¢125,000 and Bereaved members of staff GH¢3,750,000 as part of funeral policy approved by
the board.
5. Business Promotions:
a. Wedding reception for Director’s wedding day GH¢3,500,000
b. Cost of entertaining business partners GH¢1,750,000
6. Repairs to Factory premises: GH₵
a. Cost of New tiles for floor 16, 000,000
b. New gates for factory 10,000,000
c. Repair of cracks in the wall 2,500,000
7. Office Expenses includes New personal computer and stationary amounting to GH¢18,750,000 and
GH¢3,750,000 respectively.
8. Office rent paid of GH₵ 9,000,000 represents two years rent for the period ending 31st December
2013. Rental Income is taxed 8% final.
9. The written value of the company’s chargeable assets as at 31/12/2011 were as follows:
GH¢
Building (cost 6,250,000) 5,000,000
Motor Vehicles 225,000,000
Plant and Machinery 7,500,000
Computers 5,000,000
Required:
(a) Determine the Equipment 18,125
Depreciation 7,500
Casual Labour 10,500
Office Rent 9,000
Vehicle Repairs 19,500
Business Promotions 5,250
Donations 11,375
Repairs of Factory Premises 28,500
Office Expenses 22,500
Bad Debts 73,750
Advertisements 1,500 272,500
Net Profit 527,500
Notes to the Accounts:
1. Other income includes profit on disposal of fixtures and fittings amounting to GH¢15,000,000.
2. Casual Labour is made up of Factory Hands and Wages of employees in Director’s Private Property
amounting to GH¢6,250,000 and GH¢4,250,000 respectively.
3. Vehicle Repairs includes cost of new engine of GH¢4,500,000, fuel & lubricants of GH¢8,750,000
and Tyres and Tubes of GH¢6,250,000.
4. Donations consist of the following: Kotoko Football Club GH¢7,500,000, National Trust Fund
GH¢125,000 and Bereaved members of staff GH¢3,750,000 as part of funeral policy approved by
the board.
5. Business Promotions:
a. Wedding reception for Director’s wedding day GH¢3,500,000
b. Cost of entertaining business partners GH¢1,750,000
6. Repairs to Factory premises: GH₵
a. Cost of New tiles for floor 16, 000,000
b. New gates for factory 10,000,000
c. Repair of cracks in the wall 2,500,000
7. Office Expenses includes New personal computer and stationary amounting to GH¢18,750,000 and
GH¢3,750,000 respectively.
8. Office rent paid of GH₵ 9,000,000 represents two years rent for the period ending 31st December
2013. Rental Income is taxed 8% final.
9. The written value of the company’s chargeable assets as at 31/12/2011 were as follows:
GH¢
Building (cost 6,250,000) 5,000,000
Motor Vehicles 225,000,000
Plant and Machinery 7,500,000
Computers 5,000,000
Required:
(a) Determine the Company’s Chargeable income and Tax Liability with Relevant Explanatory Notes for
the 2012 year of assessment.

c) Outline the Principles for Examination of Corporate Accounting Statements for Tax Purposes.

b) Outline any SIX (6) Tax Incentives to Companies in Ghana.

( for Tax Purposes.

b) Outline any SIX (6) Tax Incentives to Companies in Ghana.