IPM Garment Manufacturing Company operates in Macau. Its profit and loss account for the year ended 31 December 2014 as follows: MOPS MOPS Sales 85,000,000 Dividend income 500.000 Other income 1.500.000 Total income 87,000,000 Cost of goods sold 66,000,000 Salaries and wages 12,500,000 Depreciation 1,140,000 Increase to provision for loss of inventory value 300,000 Donations 190,000 Taxes 134,000 Miscellaneous expenses 200,000 (80.464.000 Profit before tax 6,536,000 Provisional Complementary Income Tax (950.000) Profit after tax 5.586.000 Additional Information: i) Dividend income was derived from investing in an associated company (a Group A taxpayer) in Macau. It represented IPM's share of the associated company's after tax profit (Complementary Income Tax already paid by the associated company). ii) Included in other income is MOP558,000 of tax refunded (related to the year 2011) by the Finance Services Bureau. The remaining amount included MOPS400,000 as gain on sale of a patent right and MOP$42,000 as interest earned on a note receivable. iii) Salaries and wages include employees' Professional Tax of MOP$280,000. iv) Depreciation expense was calculated based on straight-line and zero salvage value. Details are as follows: Fixed asset Cost (MOPS) Depreciation (MOPS) Electronic equipment and machinery 3,000,000 600,000 Non-electronic equipment and machinery 1,600,000 320,000 Office computer system 400,000 80,000 Heavy vehicles 700,000 140,000 Total 1,140,000 v) In order to reflect the real value of ending inventory in the company's balance sheet based on the lower-of-cost-or-market principle, IPM has since the year 2014 set up a provision account for loss of inventory value. The ending book value of inventory on 31 December, 2014 was MOP$6,000,000 The fair market value of the inventory on the same day was MOP$5,700,000. vi) Donations included MOP$120,000 to Tung Sin Tong and MOP$70,000 to the Macau Red Cross. Both of them are approved charitable organizations in Macau. vii) Taxes included Industrial Tax MOP$300 and Urban Property Tax MOP$133,700. viii) The 31 December 2014 ending balance of accounts receivable was MOP$7,000,000. On the same day, the remaining balance of the provision for bad debt account was MOP$180,000. This amount of provision was set up in 2013. No additions or deductions were made to the provision account in 2014. ix) Miscellaneous expenses included the following: Advertising and promotion Insurance for managers (not compulsory) Selling and distribution Communication expenses Rent Financial expenses Legal expenses Compensation for an insurable loss (but no insurance had been purchased) MOP$30,000 19,000 30,000 12,000 47,000 30,000 7,000 25,000 MOP$200,000 Required: Calculate IPM's 2014 Complementary Income Tax payable. Provide explanations to support your calculations by citing the relevant articles.

Q.1 PM Manfarring Company wies in Macau. Ils profitne ended 31 December 2014 sets 5.000 Desde come So Other inom Tosince Corn | Salaries and was Increase te person salon of my walue Does ce . Profor Pool Complementary To Profile Additionat vided www.dered from Meal Maste ac y a) cated in there is MOPS8,000 yeye Services Mom Thenga MOPS42.000 camera =Salaries and wage incluye M. Deprecatepeckledge Sollte Fle MODS Elendary Non- ced machinery compleystem Heavy 2000 In letterstel woning in the wer-of-cost principle, as they for y value. The ending back after 3 December The Draket value of the mythe cameras Dennis included MOPS120.000 TS TOPSTER Both of them are approved charitable ar Tiedot Tex MOPS Chery TM The 31 December 2014 ending balance of a commerce et de day, the main halance of two or had con The of proti Nediti dodatnomalehti Miscellaneous experies included the for Advertising and leverance for manager incepty Selling and Comincipe Frucial experts Legalpones Compensations had to purchased Required: . Calate IPM 2014 Cumpar compressione porter cakalabas citiegetries Q.1 IPM Manufacturing Company operates in Macau. Its profit and loss account for the year ended 31 December 2014 as follows: MOPS MOPS 85,000,000 500,000 1.500,000 87,000,000 Sales Dividend income Other income Total income Cost of goods sold Salaries and wages Depreciation Increase to provision for loss of inventory value Donations Taxes Miscellaneous expenses Profit before tax Provisional Complementary Income Tax Profit after tax 66,000,000 12,500,000 1,140,000 300,000 190,000 134,000 200,000 (80.464.000 6,536,000 (950.000 5,586,000 Additional Information: i) ii) iii) iv) Dividend income was derived from investing in an associated company (a Group A taxpayer) in Macau. It represented IPM's share of the associated company's after tax profit (Complementary Income Tax already paid by the associated company) Included in other income is MOPS58,000 of tax refunded (related to the year 2011) by the Finance Services Bureau. The remaining amount included MOPS400,000 as gain on sale of a patent right and MOPS42,000 as interest earned on a note receivable. Salaries and wages include employees' Professional Tax of MOPS280,000. Depreciation expense was calculated based on straight-line and zero salvage value. Details are as follows: Fixed asset Cost (MOPS) Depreciation (MOPS) Electronic equipment and machinery 3,000,000 600,000 Non-electronic equipment and machinery 1,600.000 320,000 Office computer system 400,000 80,000 Heavy vehicles 700,000 140.000 1.140,000 In order to reflect the real value of ending inventory in the company's balance sheet based on the lower-of-cost-or-market principle, IPM has since the year 2014 set up a provision account for loss of inventory value. The ending book value of inventory on 31 December, 2014 was MOPS6,000,000 The fair market value of the inventory on the same day was MOP55,700,000. Donations included MOP$120,000 to Tung Sin Tong and MOPS70,000 to the Macau Red Cross. Both of them are approved charitable organizations in Macau. Total v) vi) vii) viii) Taxes included Industrial Tax MOPS300 and Urban Property Tax MOPS 133,700. The 31 December 2014 ending balance of accounts receivable was MOPS7,000,000. On the same day, the remaining balance of the provision for bad debt account was MOPS180,000. This amount of provision was set up in 2013. No additions or deductions were made to the provision account in 2014. ix) Miscellaneous expenses included the following: Advertising and promotion Insurance for managers (not compulsory) Selling and distribution Communication expenses Rent Financial expenses Legal expenses Compensation for an insurable loss (but no insurance had been purchased) MOPS30,000 19.000 30,000 12.000 47,000 30,000 7,000 25.000 MOPS200,000 Required: Calculate IPM's 2014 Complementary Income Tax payable. Provide explanations to support your calculations by citing the relevant articles. . Note: The tax exemption for complementary income taxpayers has been set at MOPS600,000 since 2014 Q.1 PM Manfarring Company wies in Macau. Ils profitne ended 31 December 2014 sets 5.000 Desde come So Other inom Tosince Corn | Salaries and was Increase te person salon of my walue Does ce . Profor Pool Complementary To Profile Additionat vided www.dered from Meal Maste ac y a) cated in there is MOPS8,000 yeye Services Mom Thenga MOPS42.000 camera =Salaries and wage incluye M. Deprecatepeckledge Sollte Fle MODS Elendary Non- ced machinery compleystem Heavy 2000 In letterstel woning in the wer-of-cost principle, as they for y value. The ending back after 3 December The Draket value of the mythe cameras Dennis included MOPS120.000 TS TOPSTER Both of them are approved charitable ar Tiedot Tex MOPS Chery TM The 31 December 2014 ending balance of a commerce et de day, the main halance of two or had con The of proti Nediti dodatnomalehti Miscellaneous experies included the for Advertising and leverance for manager incepty Selling and Comincipe Frucial experts Legalpones Compensations had to purchased Required: . Calate IPM 2014 Cumpar compressione porter cakalabas citiegetries Q.1 IPM Manufacturing Company operates in Macau. Its profit and loss account for the year ended 31 December 2014 as follows: MOPS MOPS 85,000,000 500,000 1.500,000 87,000,000 Sales Dividend income Other income Total income Cost of goods sold Salaries and wages Depreciation Increase to provision for loss of inventory value Donations Taxes Miscellaneous expenses Profit before tax Provisional Complementary Income Tax Profit after tax 66,000,000 12,500,000 1,140,000 300,000 190,000 134,000 200,000 (80.464.000 6,536,000 (950.000 5,586,000 Additional Information: i) ii) iii) iv) Dividend income was derived from investing in an associated company (a Group A taxpayer) in Macau. It represented IPM's share of the associated company's after tax profit (Complementary Income Tax already paid by the associated company) Included in other income is MOPS58,000 of tax refunded (related to the year 2011) by the Finance Services Bureau. The remaining amount included MOPS400,000 as gain on sale of a patent right and MOPS42,000 as interest earned on a note receivable. Salaries and wages include employees' Professional Tax of MOPS280,000. Depreciation expense was calculated based on straight-line and zero salvage value. Details are as follows: Fixed asset Cost (MOPS) Depreciation (MOPS) Electronic equipment and machinery 3,000,000 600,000 Non-electronic equipment and machinery 1,600.000 320,000 Office computer system 400,000 80,000 Heavy vehicles 700,000 140.000 1.140,000 In order to reflect the real value of ending inventory in the company's balance sheet based on the lower-of-cost-or-market principle, IPM has since the year 2014 set up a provision account for loss of inventory value. The ending book value of inventory on 31 December, 2014 was MOPS6,000,000 The fair market value of the inventory on the same day was MOP55,700,000. Donations included MOP$120,000 to Tung Sin Tong and MOPS70,000 to the Macau Red Cross. Both of them are approved charitable organizations in Macau. Total v) vi) vii) viii) Taxes included Industrial Tax MOPS300 and Urban Property Tax MOPS 133,700. The 31 December 2014 ending balance of accounts receivable was MOPS7,000,000. On the same day, the remaining balance of the provision for bad debt account was MOPS180,000. This amount of provision was set up in 2013. No additions or deductions were made to the provision account in 2014. ix) Miscellaneous expenses included the following: Advertising and promotion Insurance for managers (not compulsory) Selling and distribution Communication expenses Rent Financial expenses Legal expenses Compensation for an insurable loss (but no insurance had been purchased) MOPS30,000 19.000 30,000 12.000 47,000 30,000 7,000 25.000 MOPS200,000 Required: Calculate IPM's 2014 Complementary Income Tax payable. Provide explanations to support your calculations by citing the relevant articles. . Note: The tax exemption for complementary income taxpayers has been set at MOPS600,000 since 2014