Tropical Paradise Limited owns a franchise of restaurants on a Caribbean island. An analysis of the financial accounts for the year ended 31 October 2019 was as follows:

Gross profit from restaurant sales $ 14, 721,000

Other Income

Capital Gain from sale of property 343,000

Interest on Government debenture 65,000

Dividends received from local companies 92,000

Bank deposit interest 21,200 521,200

15, 242, 200

Less

Electricity 138,700

Depreciation (1) 148,000

Wages & Salaries 1,245,350 Directors’ fees 700,960

Advertising 40,500

Postage, telephone and stationery 104,500

Loan interest payable 35,000

Professional fees (2) 136,400

Miscellaneous expenses (3) 36,300

Subscriptions and donations (4) 14,000

Travel and entertainment (5) 50,000

Franchise fee 500,000 3,149,710

NET INCOME $12,092,490 Figures in brackets refer to notes:

1. 1. Depreciation charged is $50,000 more than the wear and tear allowances allowed by Inland Revenue

2. 2. Professional fees:

Audit and accountancy 60,000

Cost of successful tax appeal 1,000

Legal fees re collection of bad debts 3,600 Cost of defending action by a former

employee for sexual harassment 25,000 Architect’s fee for designing a new

Warehouse which was not used 46,800

$ 136,400

3. 3. Miscellaneous expenses

Expense accounts for overseas

sales persons 24,500

Christmas gifts to office staff by owners 11,800

$ 36,300

4. 4. Subscriptions and donations

Subscriptions to local newspapers 1,200 Donation to owner’s alumni university

overseas 7,000

Contribution to local football team 5,800

$ 14,000

5. 5. Travel and entertainment

Travel by owners to conference in

Miami for restaurant owners 5,000

Entertainment of overseas travel agents 3,000

Purchase of new bus to transport staff 30,000

Maintenance and upkeep of staff bus 12,000

$ 50,000

REQUIRED:

1. a) Calculate the corporation tax assessable and payable if these restaurants are located in

Jamaica, Trinidad or St Lucia (Select only 1 country) [15 marks]

As part of the calculation, indicate as a note why any item in the financial accounts has been excluded. (You must indicate which country you have selected)

Corporation tax rates

Jamaica 30%

Trinidad 25%

St Lucia 30%

2. b) Identify 5 documents that must accompany the corporation tax return when it is filed.