Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Law & Ethics Expert

problem1. describe clearly the tax treatment to be given to compensation received by a taxpayer for the loss of the following asset of his business:

(i) A current or circulating asset (e.g. trading stock);

(ii) A tangible noncurrent or fixed capital asset;

(iii) An intangible asset (e.g. a contract).

problem2. 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.    

problem3. 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.

Business Law & Ethics, Finance

  • Category:- Business Law & Ethics
  • Reference No.:- M96138

Have any Question? 


Related Questions in Business Law & Ethics

Business law exam1 the new city council recently passed an

Business Law Exam 1) The New City council recently passed an ordinance revising the hiring criteria for public transportation workers. The criteria apply to those who operate and maintain public transportation equipment, ...

If you work for a financial service organization such as a

If you work for a financial service organization (such as a bank or credit union), which law from 1999 affects your use of customer data? What other effects does it have? Which 1997 law provides guidance on the use of en ...

Question 1 because they were often at war ambitious

Question 1: Because they were often at war, ambitious European monarchs desperately needed revenues. Some of them started calling assemblies of notables to levy taxes. In return for their "power of the purse," these asse ...

Assignment assault battery and crimes against personsreview

Assignment: Assault, Battery, and Crimes against Persons Review the following scenario in order to complete this assignment: (A) is walking alone late at night when a man suddenly jumps in front of her and drags her into ...

Text book - introduction to law enforcement an insiders

Text Book - INTRODUCTION TO LAW ENFORCEMENT AN INSIDER'S VIEW, FOURTH EDITION by William G. Doerner Chapter 3 - The Structure of American Law Enforcement 1) In a narrative format of no less than (500 words), brief the Jo ...

Assignment1warranty review assignment find a warranty

Assignment 1. Warranty Review Assignment. Find a "warranty" pertaining to the sale of goods. Normally, these are included in the boxes containing electronic devices, home appliances, and electrical tools. You can also fi ...

Prepare your 1500 word final proposal that focuses on how

Prepare your 1,500 word final proposal that focuses on how you will use your education to improve the criminal justice system at the federal, state, county, or city level. This should not be an outline or draft but a com ...

Discussion response - 250 to 300 words to the message below

Discussion response - 250 to 300 words to the message below with your initial response including cited information from the text, readings, and other course related information to support your response. What is organizat ...

Ethics papers -write a 1400- to 1750-word paper in which

Ethics papers - Write a 1,400- to 1,750-word paper in which you analyze the relationship between ethics and professional behavior in the administration of criminal justice. Explain the role of critical thinking with rega ...

International law please respond to the followingdiscuss

"International Law" Please respond to the following: Discuss why the United States is not often on board with many of the efforts, tribunals, courts, and declarations of international law. Give an example. • Give your op ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro