PEB IMPORT & EXPORT Co.,Ltd is local company that makes accounting transactions locally and overseas, and company buys and sells two major goods such as cars and computers , but cars are imported from overseas while computers are bought from local market. Under the tax regulations, PEB IMPORT & EXPORT Co.,Ltd is required to calculate and pay annual Tax on Profit.
The following extracts of transactions in relation to the tax year ended 31 December 2016.
| Date | Transactions: |
| 1-Jan-16 | Beginning costs of inventories for 10 cars and 40 Dell model computers are assumed $190,000 and $22,900 respectively. |
| 10-Feb-16 | Company imports 20 cars from overseas; each car is $15,000 and purchase in cash. |
| 11-Feb-16 | Company uses service from famous customs clearance company for importation of cars on Feb 10,2016 , and following assumption costs are follows:
– Import tax of $30,000 – Specific tax of $50,000 – VAT Input from customs $38,000 – Other importation costs of $50 – Clearance costs of $1,000 – Transportation in of $4,000 – VAT input from clearance company of $500 Company assumes these costs are from one supplier, Trading & Clearance Co and paid immediately to this clearance company. |
| 17-April-16 | Purchased computers as follows.
-100 Dell model computers on credit, and each cost is $600 (exclude VAT) -50 Lenovo model computers in cash, and each cost is $550(exclude VAT) -VAT input = $8,750 |
| 18-April-16 | Transportation in and handling costs are $1,500 for purchasing computers on April 17, 2016. |
| 20-Sep-16 | Sold 3 cars of $90,000 ( include VAT) |
| 30-Nov-16 | Sold 10 Dell model computers of $10,000 (include VAT) |
| 31-Dec-16 | The following expenses during year 2016 are as follows:
– Salary expenses of $5,000 -Electricity and water supply of $500 -Transportation of goods sold to customers of $700 -Office and warehouse rental of $2,000 -Office repair of $500 – Staff party expense for coming new year 2017 of $1,500 -Patent expense of $300 – Company promoted products via Facebook page of $300 – Accounting system preparation expense for company of $ $3,000 – office supply expenses of $100 |
| 31-Dec-16 | At the end of year, company calculated costs of ending inventories as follows:
– 130 Dell model computers of $ 78,175 – 50 Lenovo model computers of $ 28,000 – 27 Cars of $ 518,050 |
Required:
Prepare extracts of income statement and costs of goods sold table which are completed and complied with tax form requirement as follows:
- Components of income statement are from Bo to B42 if any, and you are required to calculate profit before tax (B42).
- Components of costs of goods sold table are from D1 to D9 if any.
Please take notes as follows:
- VAT (value added tax) rate is 10%
- Ignore other relevant taxes.