Question
Company A is registered under Thai Laws. It is VAT registrant. As of 2021 Company A has total revenue 100,000,000 THB and accounting net profit
Company A is registered under Thai Laws. It is VAT registrant.
As of 2021 Company A has total revenue 100,000,000 THB and accounting net profit 10,000,000 THB. Share capital of this company is 20,000,000 THB. During the tax filing, chief accountant has discovered the below.
- Dividend Income:
In September 2020, the company invested into 30% of share in Company Z (Thai Company)
In January 2021, the company received dividend from Company Z for 500,000 THB. Accountant recorded this transaction as below
Dr. Cash 450,000
Dr. Withholding tax receivable 50,000
Cr. Dividend income 500,000
Record receipt of dividend from Company Z.
In May 2021, the company disposed the investment in Company Z.
- Provision:
In December 2021, the company has the following transactions.
Dr. Doubtful accounts 900,000
Cr. Provision for doubtful accounts 900,000
Record provision for doubtful accounts for 2021.
Dr. Obsolete inventory 70,000
Cr. Provision for obsolete inventory 70,000
Record provision for obsolete inventory for 2021.
Dr. Audit fee 120,000
Cr. Accrued expense 120,000
Record audit fee for 2021.
- The accountant forgot to record invoice number 2999. This invoice is Sales invoice for Sales in December for 500,000 THB (incl. VAT)
- The accountant recorded purchase VAT for purchasing of inventory as expense for 80,000 THB.
- Entertainment expense in 2021 is 500,000 THB. (incl. VAT).
- In 2021, the company pays rental of truck at 40,000 THB per month (excl. VAT) for the whole year.
- The company purchases a car for managing directors on 1 July 2021. The accountant booked depreciation for 800,000 THB. Cost of this car is 8,000,000 THB (incl. VAT).
- The director decided to write off a receivable for 1,500,000 THB after pursuing for the collection. The accounting record is as below.
Dr. Doubtful accounts 750,000
Dr. Provision for doubtful accounts 750,000
Cr. Account receivable 1,500,000
Record writes off uncollected receivable
- The company has loss carried forward as table below.
| Year | Profit | Loss |
| 2015 |
| 1,000,000 |
| 2016 | 500,000 |
|
| 2017 | 300,000 |
|
| 2018 | 200,000 |
|
| 2019 |
| 2,000,000 |
| 2020 | 1,000,000 |
|
- Corporate income tax rate is 20%.
Instruction:
- Write down your explanation for each finding from Chief accountant.
- Calculate taxable net profit.
- Calculate corporate income tax.
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Auditing Mantras Forensic Accounting Important Standards On Auditing
Authors: Buffy Mielcarek
1st Edition
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