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The audited financial statements for New Life Manufacturing for year - end December 3 1 , 2 0 2 2 , show an accounting profit
The audited financial statements for New Life Manufacturing for yearend December
show an accounting profit after tax of $ after charging the following:
Depreciation $
Tax for the year $
Property Tax $
Interest expense $
Preference dividends of $
Legal fees $
Insurance of $
Bad debts $
Foreign Travel $
Repairs and Maintenance $
General expenses $
Other Information
Property Tax of $ was paid for the property on which the companys factory is
located; $ for the office premises and $ for the CEOs home.
The insurance was paid for the factory and office premises.
Loss on disposal of fixed assets $
Income Tax Refund of $ was included as part of the entitys income.
The bad debt expense includes a general provision of $ and a specific provision of
$
The company paid final ordinary dividends totaling $
Repairs and maintenance include $ removing the office ceramic floor titles and
replacing it with wooden flooring.
Included in the companys total assessable income is exempt income of $
$ relates to expenses incurred in earning this exempt income.
Legal fees include:
$ in respect of recovery of commercial debts for New Life Manufacturing.
$ in respect of recovery of commercial debts for the head office in Cayman. The
company was reimbursed this amount.
$ in respect of recovery of commercial debts for the subsidiary company in the
United States. The company was not reimbursed this amount.
$ relating to the purchase of new company that will be located in Barbados.
General expenses include $ for the school fees of the CEOs son.
The capital allowances have been calculated at $ Based on the items included
in the fixed asset schedule.
There was an increase in wages of $ which qualifies for Employment Tax
Credit all other conditions to qualify for this credit were met
Assume capital allowance rate of p A for building leasehold improvements.
All amounts are in Barbadian currency.
Required
Calculate the Corporation Tax Payable for New Life using the Barbados Income Tax Act, or any
other relevant document explain the treatment of the items included or omitted from the
income tax computation. Your answer should include the reasons for all adjustments made.
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