Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Real Growth Limited is a watch manufacturer carrying on business in Hong Kong. Its profits and loss accounts for the year ended 30 June 2013

image text in transcribed

Real Growth Limited is a watch manufacturer carrying on business in Hong Kong. Its profits and loss accounts for the year ended 30 June 2013 are as follows: Notes: 1. Sales gross profits The sales contracts for the goods sold to Singapore customers were effected in Singapore. 2. Dividends The company invests its surplus cash partly in stocks listed on the local stock market and partly in stocks listed on overseas stock markets. One-third of the dividends were received from stocks listed on overseas markets. 4. Kental Income The company sub-let out a spare warehouse and earned rental income of $116,000 during the year. 5. Compensation In December 2012, one of the company's many customers suddenly cancelled the longestablished purchase agreement with the company. By mutual agreement, the company received $342,000 as compensation. 6. Sale of trademark On 1 October 2011, the company acquired from a clock manufacturer in US the trademark in respect of its products for use in the company's newly established clock manufacturing business in Hong Kong. The purchase price of the trademark was $289,000. The new business turned out to be a failure and the trademark was sold for $115,000. Compute the total taxable income of Real Growth Limited for the year of assessment 2013/14. (Notes are not required)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

11th Edition

978-0132568968, 9780132568968

More Books

Students also viewed these Accounting questions