>Ajisebioyo Ltd, a manufacturing concem of leather products, commenced business on
February 1, 2011 and its adjusted profits were:
Period ended 31 July, 2011
Year ended 31 July, 2012
Year ended 31 July, 2013
Period ended 31 December, 2014
Year ended 31 December, 2015
Year ended 31 December, 2016
Purchases of non-current asset were as follows:
1 March, 2011
11 September, 2011
1 October, 2013
1 February, 2015
29 November, 2015
Plant & Machinery
Office Furniture
Motor Vehicle
motor Vehicle
Building
6,000,000
12,000,000
4,800,000
8,500,000
7,200,000
1,200,000
8,000,000
2,000,000
3,000,000
4,000,000
9,000,000
You are required to compute the capital allowances and income tax payable for the relevant
years of assessment assuming that:
i.
ii.
iii.
The company enjoys an investment allowance of 10%
The company and the tax authority take advantage of the options available to them at
commencement of business and on a
change of accounting date.
Income Tax rate for all the
years is 30%
iv. Rates of capital allowances for all the years are:
Building
Plant & Machinery
Furniture
Motor Vehicle
Initial Allowance (%)
2228
15
50
25
50
Annual Allowance (%)
10
25
20
25
(30Marks)