Order ID:89JHGSJE83839 | Style:APA/MLA/Harvard/Chicago | Pages:5-10 |
Instructions:
Tax Treatment to Be Given to Compensation Discussion
Question Description
Question 2: (a) Explain clearly the tax treatment to be given to compensation received by a taxpayer for the loss of the following assets of his business: (i) a current or circulating asset(e.g. trading stock); (ii) a tangible non-current or fixed capital asset; (iii) an intangible asset (e.g. a contract).
(b) A company trades as a ship owner and recovered damages from ship repairers that exceeded the time stipulated for overhaul. How would you treat the damages received for income tax purposes? Give reasons for your answer.
(c) A fire damaged a warehouse and a machine shop housing the production plant of an engineering company. Some of the plant was totally destroyed but the remainder was capable of repair as were the buildings. An insurance claim was settled on the closing date of the accounts for Rs 512,000 which was credited to a suspense account in the Balance Sheet.
The amount recovered is made up as shown below: Rs (i) Damage to warehouse 50,000 (Actually spent on repairs Rs 55,200) (ii) Damage to factory workshop 70,000 (Actually spent on repairs Rs 62,000) (iii) Plant & Machinery destroyed 112,000 (But book value in company books Rs120,000 transferred to a “Destroyed Plant A/c” and then debited to Profit & Loss. Tax written down value or base value for capital allowance purposes: Rs 100,000) (iv) Cost of repairs to Plant & Machinery 64,000 (Actually spent) (v) Cleaning and other expenses 12,000 (carried out by company’s own workmen) (vi) Loss of profit (due to temporary stoppage of production for 3 months) 74,000
(vii) Loss of stock destroyed or damaged 130,000 512,000 Required: Say how you would deal with each of the above items in the computation of the company’s income tax liability, giving your reasons. You should assume that all the expenses mentioned at (i),(ii),(iv) and (v) above have been debited to the Profit &Loss Account
RUBRIC |
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Excellent Quality 95-100%
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Introduction
45-41 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Literature Support 91-84 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Methodology 58-53 points Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met. |
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Average Score 50-85% |
40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided. |
83-76 points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration. |
52-49 points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met. |
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Poor Quality 0-45% |
37-1 points The background and/or significance are missing. No search history information is provided. |
75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration. |
48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met |
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Tax Treatment to Be Given to Compensation Discussion |
Tax Treatment to Be Given to Compensation Discussion