Calculate the Net Income, Annual Corportate Taxes and VAT (fiscal year 2019) of a Company located in Madrid, Spain based on the following information:

The Company has an Tax ID as an Intracommunity Operator.

All values with no VAT included.

Corporate Tax rate in Spain is 25%.

Make use of the LTD table and Solution worksheets.

Ref #

Description

1

Salaries of 45,000 EUR in 2019

2

Advertising 12,000 EUR in 2019 @ 21% VAT

3

Dividends of 4,000 EUR in 2019

4

Revenues of 450,000 EUR in 2019 (40% were national sales and the rest from Italian customers). Assume a VAT rate of 21%

5

Utilities of 11,000 EUR in 2019 @21% VAT

6

In Dec, 31 st 2018 the ending Inventory was 100,000 EUR, purchases during 2019 were 220,000 EUR (@ 21% VAT) and final inventory at the end of 2019 was 50,000 EUR.

40% of the raw material is supplied by a Murcian Company, and 60% by company based in France.

7

The company paid 7,000 EUR to reduce its accounts payable.

8

A Long-term debt was signed in March 1st 2015 with BBVA Bank to finance a machinery wich its cost was 65,000 EUR (@VAT rate of 16%). The contract will last only 5 years.

The useful life of the asset is 5 years. Assume a salvage value of 1,400 EUR

Use the straight line depreciation.

Use the french system amortization. All payment will take place at the end of each month. Fixed interest rate is 4.35% p.a. (monthly payments)

9

Depreciation of other fixed assets were 11,000 EUR in 2019

10

Renting expenses were 17,000 EUR in 2019 @21 VAT

11

Cash collections from a national customer were 4,500 EUR, 60 days later when the Invoice was issued.

12

Transportations expenses were 10,000 EUR in 2019 @21 VAT

13

Interests income earned from a Financial Investment were 5,300 EUR

14

Insurance expenses in 2019 were 5,850 EUR @21% VAT

15

The machinery purchased (item 9) was sold at its current book value by October 1st 2019. Assume a VAT rate of 16%

16

The Company plans to start renting a new Warehouse by January 2020, so 1,400 EUR had to be paid in advance by December 21st, 2019. Assume a VAT rate of 21%