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A.Retained earnings of $2,072,000.
B.A deficit of $2,072,000.
C.A book value of $9.46 per share of common stock.
D.A book value of $28 per share of common stock.
答案
更多“Li's Corporation has net assets of $2,072,000 and paid-in capital of $700,000. The”相关的问题
第1题
For the year ended 5 April 2016, OK-Joe Ltd’s taxable total profits, before taking account of director’s remuneration, are ￡65,000. After allowing for employer’s class 1 national insurance contributions (NIC) of ￡5,141, Joe’s gross director’s remuneration is ￡59,859.
The figure for employer’s NIC of ￡5,141 is after deducting the ￡2,000 employment allowance.
Required:
Calculate the overall saving of tax and NIC for the year ended 5 April 2016 if Joe had instead paid himself gross director’s remuneration of ￡8,000 and net dividends of ￡45,600.
Notes:
1. You are expected to calculate the income tax payable by Joe, the class 1 NIC payable by both Joe and OK-Joe Ltd, and the corporation tax liability of OK-Joe Ltd for the year ended 5 April 2016. 2. You should assume that the rate of corporation tax remains unchanged.
第2题
He got a job with the corporation in 1991 and has worked there ______.
A．since
B．ever since
C．ever before
D．till then
第3题
Section B – TWO questions ONLY to be attempted
The finance division of GoSlo Motor Corporation has made a number of loans to customers with a current pool value of $200 million. The loans have an average term to maturity of four years. The loans generate a steady income to the business of 10·5% per annum. The company will use 95% of the loan’s pool as collateral for a collateralised loan obligation structured as follows:
– 80% of the collateral value to support a tranche of A-rated floating rate loan notes offering investors LIBOR plus 140 basis points.
– 10% of the collateral value to support a tranche of B-rated fixed rate loan notes offering investors 11%.
– 10% of the collateral value to support a tranche as subordinated certificates (unrated).
In order to minimise interest rate risk, the company has decided to enter into a fixed for variable rate swap on the A-rated floating rate notes exchanging LIBOR for 8·5%.
Service charges of $240,000 per annum will be charged for administering the income receivable from the loans.
You may ignore prepayment risk.
Required:
(a) Calculate the expected returns of the investments in each of the three tranches described above. Estimate the sensitivity of the subordinated certificates to a reduction of 1% in the returns generated by the pool. (10 marks)
(b) Explain the purpose and the methods of credit enhancement that can be employed on a securitisation such as this scheme. (4 marks)
(c) Discuss the risks inherent to the investors in a scheme such as this. (6 marks)
第4题
Nikau Ltd to develop a new product range, under the name ‘Project Sabal’. Nikau Ltd owns shares in a non-UK
resident company, Date Inc.
The following information has been extracted from client files and from a meeting with the Finance Director of Palm
plc.
Palm plc:
– Has more than 40 wholly owned subsidiaries such that all group companies pay corporation tax at 30%.
– All group companies prepare accounts to 31 March.
– Acquired Nikau Ltd on 1 November 2007 from Facet Ltd, an unrelated company.
Nikau Ltd:
– UK resident company that manufactures domestic electronic appliances for sale in the European Union (EU).
– Large enterprise for the purposes of the enhanced relief available for research and development expenditure.
– Trading losses brought forward as at 1 April 2007 of ￡195,700.
– Budgeted taxable trading profit of ￡360,000 for the year ending 31 March 2008 before taking account of ‘Project
Sabal’.
– Dividend income of ￡38,200 will be received in the year ending 31 March 2008 in respect of the shares in Date
Inc.
‘Project Sabal’:
– Development of a range of electronic appliances, for sale in North America.
– Project Sabal will represent a significant advance in the technology of domestic appliances.
– Nikau Ltd will spend ￡70,000 on staffing costs and consumables researching and developing the necessary
technology between now and 31 March 2008. Further costs will be incurred in the following year.
– Sales to North America will commence in 2009 and are expected to generate significant profits from that year.
Shares in Date Inc:
– Nikau Ltd owns 35% of the ordinary share capital of Date Inc.
– The shares were purchased from Facet Ltd on 1 June 2003 for their market value of ￡338,000.
– The sale was a no gain, no loss transfer for the purposes of corporation tax.
– Facet Ltd purchased the shares in Date Inc on 1 March 1994 for ￡137,000.
Date Inc:
– A controlled foreign company resident in the country of Palladia.
– Annual chargeable profits arising out of property investment activities are approximately ￡120,000, of which
approximately ￡115,000 is distributed to its shareholders each year.
The tax system in Palladia:
– No taxes on income or capital profits.
– 4% withholding tax on dividends paid to shareholders resident outside Palladia.
Required:
(a) Prepare detailed explanatory notes, including relevant supporting calculations, on the effect of the following
issues on the amount of corporation tax payable by Nikau Ltd for the year ending 31 March 2008.
(i) The costs of developing ‘Project Sabal’ and the significant commercial changes to the company’s
activities arising out of its implementation. (8 marks)
第5题
5 (a) Carver Ltd was incorporated and began trading in August 2002. It is a close company with no associated
companies. It has always prepared accounts to 31 December and will continue to do so in the future.
It has been decided that Carver Ltd will sell its business as a going concern to Blade Ltd, an unconnected
company, on 31 July 2007. Its premises and goodwill will be sold for ￡2,135,000 and ￡290,000 respectively
and its machinery and equipment for ￡187,000. The premises, which do not constitute an industrial building,
were acquired on 1 August 2002 for ￡1,808,000 and the goodwill has been generated internally by the
company. The machinery and equipment cost ￡294,000; no one item will be sold for more than its original cost.
The tax adjusted trading profit of Carver Ltd in 2007, before taking account of both capital allowances and the
sale of the business assets, is expected to be ￡81,000. The balance on the plant and machinery pool for the
purposes of capital allowances as at 31 December 2006 was ￡231,500. Machinery costing ￡38,000 was
purchased on 1 March 2007. Carver Ltd is classified as a small company for the purposes of capital allowances.
On 1 August 2007, the proceeds from the sale of the business will be invested in either an office building or a
portfolio of UK quoted company shares, as follows:
Office building
The office building would be acquired for ￡3,100,000; the vendor is not registered for value added tax (VAT).
Carver Ltd would borrow the additional funds required from a UK bank. The building is let to a number of
commercial tenants who are not connected with Carver Ltd and will pay rent, in total, of ￡54,000 per calendar
quarter, in advance, commencing on 1 August 2007. The company’s expenditure for the period from 1 August
2007 to 31 December 2007 is expected to be:
￡
Loan interest payable to UK bank 16,000
Building maintenance costs 7,500
Share portfolio
Shares would be purchased for the amount of the proceeds from the sale of the business with no need for further
loan finance. It is estimated that the share portfolio would generate dividends of ￡36,000 and capital gains, after
indexation allowance, of ￡10,000 in the period from 1 August 2007 to 31 December 2007.
All figures are stated exclusive of value added tax (VAT).
Required:
(i) Taking account of the proposed sale of the business on 31 July 2007, state with reasons the date(s) on
which Carver Ltd must submit its corporation tax return(s) for the year ending 31 December 2007.
(2 marks)
第6题
What is the theoretical value of the company？
A.$20m
B.$40m
C.$50m
D.$25m
第7题
(c) (i) State the date by which Thai Curry Ltd’s self-assessment corporation tax return for the year ended
30 September 2005 should be submitted, and advise the company of the penalties that will be due if
the return is not submitted until 31 May 2007. (3 marks)
(ii) State the date by which Thai Curry Ltd’s corporation tax liability for the year ended 30 September 2005
should be paid, and advise the company of the interest that will be due if the liability is not paid until
31 May 2007. (3 marks)
第8题
We think of Mr. Li ______ our good friend. A. is B. to be C. asD. has been
第9题
Section A – BOTH questions are compulsory and MUST be attempted
Tramont Co is a listed company based in the USA and manufactures electronic devices. One of its devices, the X-IT, is produced exclusively for the American market. Tramont Co is considering ceasing the production of the X-IT gradually over a period of four years because it needs the manufacturing facilities used to make the X-IT for other products.
The government of Gamala, a country based in south-east Asia, is keen to develop its manufacturing industry and has offered Tramont Co first rights to produce the X-IT in Gamala and sell it to the USA market for a period of four years. At the end of the four-year period, the full production rights will be sold to a government-backed company for Gamalan Rupiahs (GR) 450 million after tax (this amount is not subject to inflationary increases). Tramont Co has to decide whether to continue production of the X-IT in the USA for the next four years or to move the production to Gamala immediately.
Currently each X-IT unit sold makes a unit contribution of $20. This unit contribution is not expected to be subject to any inflationary increase in the next four years. Next year’s production and sales estimated at 40,000 units will fall by 20% each year for the following three years. It is anticipated that after four years the production of the X-IT will stop. It is expected that the financial impact of the gradual closure over the four years will be cost neutral (the revenue from sale of assets will equal the closure costs). If production is stopped immediately, the excess assets would be sold for $2·3 million and the costs of closure, including redundancy costs of excess labour, would be $1·7 million.
The following information relates to the production of the X-IT moving to Gamala. The Gamalan project will require an initial investment of GR 230 million, to pay for the cost of land and buildings (GR 150 million) and machinery (GR 80 million). The cost of machinery is tax allowable and will be depreciated on a straight-line basis over the next four years, at the end of which it will have a negligible value.
Tramont Co will also need GR 40 million for working capital immediately. It is expected that the working capital requirement will increase in line with the annual inflation rate in Gamala. When the project is sold, the working capital will not form. part of the sale price and will be released back to Tramont Co.
Production and sales of the device are expected to be 12,000 units in the first year, rising to 22,000 units, 47,000 units and 60,000 units in the next three years respectively.
The following revenues and costs apply to the first year of operation: – Each unit will be sold for $70;
– The variable cost per unit comprising of locally sourced materials and labour will be GR 1,350, and;
– In addition to the variable cost above, each unit will require a component bought from Tramont Co for $7, on which Tramont Co makes $4 contribution per unit;
– Total fixed costs for the first year will be GR 30 million.
The costs are expected to increase by their countries’ respective rates of inflation, but the selling price will remain fixed at $70 per unit for the four-year period.
The annual corporation tax rate in Gamala is 20% and Tramont Co currently pays corporation tax at a rate of 30% per year. Both countries’ corporation taxes are payable in the year that the tax liability arises. A bi-lateral tax treaty exists between the USA and Gamala, which permits offset of overseas tax against any USA tax liability on overseas earnings. The USA and Gamalan tax authorities allow losses to be carried forward and written off against future profits for taxation purposes.
Tramont Co has decided to finance the project by borrowing the funds required in Gamala. The commercial borrowing rate is 13% but the Gamalan government has offered Tramont Co a 6% subsidised loan for the entire amount of the initial funds required. The Gamalan government has agreed that it will not ask for the loan to be repaid as long as Tramont Co fulfils its contract to undertake the project for the four years. Tramont Co can borrow dollar funds at an interest rate of 5%.
Tramont Co’s financing consists of 25 million shares currently trading at $2·40 each and $40 million 7% bonds trading at $1,428 per $1,000. Tramont Co’s quoted beta is 1·17. The current risk free rate of return is estimated at 3% and the market risk premium is 6%. Due to the nature of the project, it is estimated that the beta applicable to the project if it is all-equity financed will be 0·4 more than the current all-equity financed beta of Tramont Co. If the Gamalan project is undertaken, the cost of capital applicable to the cash flows in the USA is expected to be 7%.
The spot exchange rate between the dollar and the Gamalan Rupiah is GR 55 per $1. The annual inflation rates are currently 3% in the USA and 9% in Gamala. It can be assumed that these inflation rates will not change for the foreseeable future. All net cash flows arising from the project will be remitted back to Tramont Co at the end of each year.
There are two main political parties in Gamala: the Gamala Liberal (GL) Party and the Gamala Republican (GR) Party. Gamala is currently governed by the GL Party but general elections are due to be held soon. If the GR Party wins the election, it promises to increase taxes of international companies operating in Gamala and review any commercial benefits given to these businesses by the previous government.
Required:
Prepare a report for the Board of Directors of Tramont Co that
(i) Evaluates whether or not Tramont Co should undertake the project to produce the X-IT in Gamala and cease its production in the USA immediately. In the evaluation, include all relevant calculations in the form. of a financial assessment and explain any assumptions made;
Note: it is suggested that the financial assessment should be based on present value of the operating cash flows from the Gamalan project, discounted by an appropriate all-equity rate, and adjusted by the present value of all other relevant cash flows. (27 marks)
(ii) Discusses the potential change in government and other business factors that Tramont Co should consider before making a final decision. (8 marks)
Professional marks will be awarded in question 1 for the format, structure and presentation of the answer. (4 marks)
第10题
(b) Explain why making sales of Sabals in North America will have no effect on Nikau Ltd’s ability to recover its
input tax. (3 marks)
Notes: – you should assume that the corporation tax rates and allowances for the financial year to 31 March 2007
will continue to apply for the foreseeable future.
– you should ignore indexation allowance.
第11题
capital of Hira Ltd from Belgrove Ltd. Belgrove Ltd currently owns 100% of the share capital of Hira Ltd and has no
other subsidiaries. All three companies have their head offices in the UK and are UK resident.
Hira Ltd had trading losses brought forward, as at 1 April 2006, of ￡18,600 and no income or gains against which
to offset losses in the year ended 31 March 2006. In the year ending 31 March 2007 the company expects to make
further tax adjusted trading losses of ￡55,000 before deduction of capital allowances, and to have no other income
or gains. The tax written down value of Hira Ltd’s plant and machinery as at 31 March 2006 was ￡96,000 and
there will be no fixed asset additions or disposals in the year ending 31 March 2007. In the year ending 31 March
2008 a small tax adjusted trading loss is anticipated. Hira Ltd will surrender the maximum possible trading losses
to Belgrove Ltd and Dovedale Ltd.
The tax adjusted trading profit of Dovedale Ltd for the year ending 31 March 2007 is expected to be ￡875,000 and
to continue at this level in the future. The profits chargeable to corporation tax of Belgrove Ltd are expected to be
￡38,000 for the year ending 31 March 2007 and to increase in the future.
On 1 February 2007 Dovedale Ltd will sell a small office building to Hira Ltd for its market value of ￡234,000.
Dovedale Ltd purchased the building in March 2005 for ￡210,000. In October 2004 Dovedale Ltd sold a factory
for ￡277,450 making a capital gain of ￡84,217. A claim was made to roll over the gain on the sale of the factory
against the acquisition cost of the office building.
On 1 April 2007 Dovedale Ltd intends to acquire the whole of the ordinary share capital of Atapo Inc, an unquoted
company resident in the country of Morovia. Atapo Inc sells components to Dovedale Ltd as well as to other
companies in Morovia and around the world.
It is estimated that Atapo Inc will make a profit before tax of ￡160,000 in the year ending 31 March 2008 and will
pay a dividend to Dovedale Ltd of ￡105,000. It can be assumed that Atapo Inc’s taxable profits are equal to its profit
before tax. The rate of corporation tax in Morovia is 9%. There is a withholding tax of 3% on dividends paid to
non-Morovian resident shareholders. There is no double tax agreement between the UK and Morovia.
Required:
(a) Advise Belgrove Ltd of any capital gains that may arise as a result of the sale of the shares in Hira Ltd. You
are not required to calculate any capital gains in this part of the question. (4 marks)
