... Jose's capital should be credited for the market value of the computer contributed by him. 1-2: b (40,000 + 80,000) ÷ 2/3 = 180,000 x 1/3 = 60,000. 1-3: a Cash P100,000 Land 300,000 Mortgage payable ( 50,000) Net assets (Julio, capital) P350,000 1-4: b Total Capital (P300,000/60%) P500,000 Perla's interest ______40% Perla's capital P200,000 Less: Non-cash asset contributed at market value Land P 70,000 Building 90,000 Mortgage Payable ( 40,000) _120,000 Cash contribution P 80,000 1-5: d - Zero, because under the bonus method, a transfer of capital is only required. 1-6: b Reyes Santos Cash P200,000 P300,000 Inventory – 150,000 Building – 400,000 Equipment 150,000 Mortgage payable ________ ( 100,000) Net asset (capital) P350,000 P750,000 1-7: c AA BB CC Cash P 50,000 Property at Market Value P 80,000 Mortgage payable ( 35,000) Equipment at Market Value _______ _______ P55,000 Capital P 50,000 P 45,000 P55,000 2 Chapter 1 1-8: a PP RR SS Cash P 50,000 P 80,000 P 25,000 Computer at Market Value __25,000 _______ __60,000 Capital P 75,000 P 80,000 P 85,000 1-9: c Maria Nora Cash P 30,000 Merchandise inventory P 90,000 Computer equipment 160,000 Liability ( 60,000) Furniture and Fixtures 200,000 ________ Total contribution P230,000 P190,000 Total agreed capital (P230,000/40%) ...
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...Partnership – Basic Considerations and Formation 1 CHAPTER 1 MULTIPLE CHOICE ANSWERS AND SOLUTIONS 1-1: a Jose's capital should be credited for the market value of the computer contributed by him. 1-2: b (40,000 + 80,000) ÷ 2/3 = 180,000 x 1/3 = 60,000. 1-2: c 1-3: a Cash P100,000 Land 300,000 Mortgage payable ( 50,000) Net assets (Julio, capital) P350,000 1-4: b Total Capital (P300,000/60%) P500,000 Perla's interest ______40% Perla's capital P200,000 Less: Non-cash asset contributed at market value Land P 70,000 Building 90,000 Mortgage Payable ( 40,000) _120,000 Cash contribution P 80,000 1-5: d - Zero, because under the bonus method, a transfer of capital is only required. 1-6: b Reyes Santos Cash P200,000 P300,000 Inventory – 150,000 Building – 400,000 Equipment 150,000 Mortgage payable ________ ( 100,000) Net asset (capital) P350,000 P750,000 1-7: c AA BB CC Cash P 50,000 Property at Market Value P 80,000 Mortgage payable ( 35,000) Equipment at Market Value _______ _______ P55,000 Capital P 50,000 P 45,000 P55,000 2 Chapter 1 1-8: a PP RR SS Cash P 50,000 P 80,000 P 25,000 Computer at Market Value __25,000 _______ __60,000 Capital P 75,000 P 80,000 P 85,000 1-9: c Maria Nora Cash P 30,000 Merchandise inventory P 90,000 Computer...
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...COST OF CAPITAL AND FOREIGN DIRECT INVESTMENT IN PAKISTAN: A NEO-CLASSICAL APPROACH Submitted by ZAHIR SHAH Assistant professor, Government College of Commerce Mansehra, N.W.F.P A research paper submitted to Pakistan Institute of Development Economics (PIDE) to be presented in the Annual Conference 2003. FISCAL INCENTIVES, THE COST OF CAPITAL AND FOREIGN DIRECT INVESTMENT IN PAKISTAN: A NEO-CLASSICAL APPROACH1 By ZAHIR SHAH• Abstract This paper analyses the attractiveness of Foreign Direct Investment (FDI) in Pakistan with special emphasis on the cost of capital element in effecting the rate of return and the internal cash flow for investment of the investing firms. Using the Jorgenson’s Neo-classical Investment Model the cost of capital is computed after considering the taxation policy and the treatment of invested capital. The paper elaborated fiscal provisions and their implications on the investment environment specifically available to foreign investors in Pakistan. The computed results show consistent and influencing impact of the cost of capital on FDI inflows. The objective of the study is to explore the a realistic and in depth investigation of the tax concessions and the response of investors. The paper argues that fiscal incentives are more appropriate in attracting FDI as these have no direct drain over public resources and are increase the after tax return by availing the tax holidays and depreciation allowances. 1. Introduction Capital can move...
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...It is not only easy to compute, but also is very convenient when the pattern to how an asset has been used is unclear. If a salvage value of an asset is given at the end of its useful life, this amount is excluded in the calculations of tax allowances, meaning that the salvage value is subject to tax. In such a case, however, the salvage value is still considered a cash inflow because eventually, it is money received by the business after asset disposal. This value is usually first taxed, and then its present value is computed. The present value of the salvage value is then summed up to the equation and thus we are able to determine the NPV of the...
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...Tax incentives Singapore is well positioned to maintain its economic competitiveness in today’s global environment with a low headline corporate tax rate of 17%, generous tax exemptions for small-to-midsize companies, and industry-specific tax incentives. The Government of Singapore provides a comprehensive package of tax concessions and incentives to businesses whose business activities reflect the direction in which the state plans to steer economic development. 1. Development and Expansion Incentive (DEI) The DEI encourages Singapore-based companies to move into high value-addition business activities, expand their operations in the country, and procure advanced machinery and equipment by offering a reduced tax in the range of 5%-10% on incremental income derived from qualifying activities. 2. International / Regional Headquarters Award (IHQ / RHQ) The Regional Headquarters Award and International Headquarters Award provide a reduced corporate tax rate on incremental income from qualifying activities. * Regional Headquarters Award: Under the (RHQ) Award, qualifying companies can enjoy a concessionary tax rate of 15% for five (3+2) years on incremental qualifying income from abroad, instead of the regular Singapore corporate tax rate of 17%. In other words, if applicant company satisfies all the minimum requirements by the third year of the incentive period, it will enjoy the 15% concessionary tax rate for an additional 2 years on qualifying income. This scheme applies...
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...Bonus Gratuity Allowances S 13(1)(b) Benefits in kind ( BIK Table) Car / MV House Furnished / Semi Furnished Driver Maid/ gardener S 13(1)(c) Living Accommodation Defined Value ( Rental paid by the employer – cost of the furniture) OR 30% X S13(1)(a)- excluding shares WIL S 13(1)(d) Withdrawal from Unapproved fund S 13(1)(e) Compensation for loss of employment GROSS EMPLOYMENT INCOME Less: Allowable expenses: STATUTORY EMPLOYMENT INCOME Add: Other Income AGGREGATE INCOME Less: Approved donations ( 7% of AI) TOTAL INCOME Less: Reliefs - RESIDENT CHARGEABLE INCOME TAX PAYABLE R – Scale rates NR - Flat rate 26% CORPORATE TAX PLANNING Commencement of business Business is commenced when essential activities of that business have started. PRELIMINARY EXPENSES / PRE OPERATING EXPS = CAPITAL EXPENDITURES Claim of Capital Allowance Capital allowance is allowed to be claimed by a company for any Fixed assets owned by that company. Any disposal of the FAs is subjected to either Balancing Charge or Balancing Allowance Disposal Price | 500,000 | 200,000 | Less: Residual Expenditure | (300,000) | (300,000) | Balancing Charge | 200,000 | | Balancing Allowance | | (100,000) | Adjusted Income / loss | 1,000,000/ nil | Add: Balancing Charge | 200,000 | Less: Balancing Allowance | (100,000) | Statutory Income | 1100,000 / 200.000 | METHOD OF FINANCING ASSETS Hire Purchase = CA Only Capital portion and deposit...
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...a) Vela owns and occupies a building that was completed last year and occupied for the first time on January 15, 2006. (Previously, the company had rented premises.) The building cost $384,000, has an estimated 20-year useful life, and an estimated residual value of $34,000. Annual amortization of $17,500 has not been recorded. Dec. 31 | Amortization Expense | | 17,500 | | | Accumulated Amortization - building, Building | | | 17,500 | | | | | | b) The Office Supplies account showed an opening balance of $895 on January 1, 2006. During the year, the owner used Office Supplies (asset account) to record the purchase of $985 of supplies. The year-end physical count of office supplies inventory only showed $705 of unused supplies on hand. Per the Dec. 31/06 trial balance the Office Supplies account balance is $1,880. DecDec. 31. 31 | Office Supplies Expense | | 1,175 | | | Office Supplies (asset) | | | 1,175 | | $895 + 985 = 1,880 – 705 = 1,175 | | | | c) The Prepaid Insurance account showed an opening balance on January 1st, 2006 of $400 representing the 4 months remaining on a 1-year insurance policy which originally cost $1,200. At the expiration of this policy on April 30, 2006, the owner paid $2,880 for another 2 years of coverage. The owner debited Prepaid Insurance...
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...CHAPTER 1 Mini-Exercises 1-1 | (5) IFRS = International Financial Reporting Standards | 1-2 | (2) F, (8) G | 1-3 | (2) I, (9) E | 1-4 | (7) L, BS | 1-5 | (3) A, BS | 1-6 | (8) SE, BS | 1-7 | (10) A, BS | 1-8 | (3) R, I/S | 1-9 | (4) A | 1-10 | (5) (I) | 1-11 | (4) (F) | 1-12 | Retained earnings 12/31/13=$50,000 | 1-13 | (c) $75,(f) $59,(i) $63 | 1-14 | (c) $80, (f) $60, (i) $700 | 1-15 | (a) $(300), (b) $70, (c) $3,900 | 1-16 | (3) Total assets=$15,463, (4) Financed primarily by liabilities (liabilities exceed stockholders’ equity) | Exercises 1-1 | (c) $3,500 + $1,300 – $500 = $4,300 | 1-2 | (d) $3,200 + $15,700 – $7,200 - $5,300 = $6,400 | 1-3 | (1) Total liabilities=$368,133 (2) Stockholders’ equity=$640,764 | 1-4 | (1) Total assets = $122,400, (4) 14,550 | 1-5 | (f) Dividends, SE | 1-6 | (1) Total expenses=$458,173 | 1-7 | Total expenses = $130,825 | 1-8 | Net income=$28,000 (C) Stockholders’ equity=$78,000 | 1-9 | Net Income is $522 (in millions). | 1-10 | (1) $18,000 | 1-11 | (3) F | 1-12 | (4) (O) | Coached Problems 1-1 | (1) Net income = $21,950,(3) Total assets = $115,500 | 1-2 | (3) Stockholders’ equity=$84,030 | 1-3 | (1) Net income=$63,098 (3) Total assets=$1,702,524 | 1-4 | (1) Creditors (2) Approximately equal amounts | Group Problems A1-1 | (1) Net income = $23,450, (3) Total assets = $113,850 | A1-2 | (1) Profitable since NI = $23,450 | A1-3 | (1) Net income=$51 (3) Total assets=$1...
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...1.0 INTRODUCTION Just a few years after independence from the United Kingdom in 1957, had the World Bank’s country‐classification system been in place, Malaysia would have qualified as a middle‐income country. Since then, it has continued to enjoy relative prosperity, initially as a commodity exporter of rubber, tin, then palm oil and petroleum, with total income rising at 6 to 7 percent each year from 1970 until 2000. As a result, industrial sector in Malaysia has been rapidly grow over the past few dacades. Industrial sector can be define as a category of stocks that relate to producing goods used in construction and manufacturing. This sector includes companies involved with aerospace and defense, industrial machinery, tools, lumber production, construction, cement and metal fabrication. Performance in the industrial goods sector is largely driven by supply and demand for building construction residential, commercial and industrial as well as the demand for manufactured products. When the economy contracts and consumers save more and spend less, activity in this sector drops because companies will postpone expansion and produce fewer goods. The industrial sectors are drawn for each contain a mixture of international corporations, national companies, entrepreneurial smaller and medium-size enterprises (SMEs) and informal local businesses. Each part of a sector may have different impacts and dependence on economics activity. In many of the examples, the...
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...The Statement of Cash Flows Purpose of a statement of cash flows: To provide information about the cash inflows and outflows of an entity during a period. To summarize the operating, investing, and financing activities of the business. The cash flow statement helps users to assess a company’s liquidity, financial flexibility, operating capabilities, and risk. The statement of cash flows is useful because it provides answers to the following important questions: Where did cash come from? What was cash used for? What was the change in the cash balance? Specifically, the information in a statement of cash flows, if used with information in the other financial statements, helps external users to assess: 1. A company’s ability to generate positive future net cash flows, 2. A company’s ability to meet its obligations and pay dividends, 3. A company’s need for external financing, 4. The reasons for differences between a company’s net income and associated cash receipts and payments, and 5. Both the cash and noncash aspects of a company’s financing and investing transactions. What can we learn from SCF that is not already available in the other financial statements? It provides answers to important questions like: Where did cash come from? What was cash used for? What was the change...
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...Doing Business in Singapore Updated as of 8 September 2006 Pioneer Management Services Pte Ltd 4 Shenton Way #04-01 SGX Centre 2, Singapore 068807 Telephone: +65 6327 6266 Facsimile: +65 6327 3855 Email: pioneer@singnet.com.sg Website: www.pioneerassociates.com.sg CONTENTS Page 1 1.1 1.2 1.3 1.4 1.5 1.6 Introduction Geography and History Population Political System Languages Currency Economy 1 1 1 1 2 2 2-3 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 Business Entities and Accounting Companies Branches Representative Offices Sole Proprietorships Partnerships Limited Liability Partnerships Joint Venture Audit and Accounting Requirements Record and Filing Requirements 3 3 3-4 4 4 4-5 5 5 5 6 3 3.1 3.2 3.3 Finance and Investment Exchange Control Sources of Finance Investment Incentives 6 6 6-8 8 CONTENTS Cont’d 4 4.1 4.2 4.3 4.4 Employment Regulations and Social Security Contributions Employment Passes and Dependent’s Passes Engagement and Dismissal Trade Unions Social Security Contributions Page 8 8-9 9 9 10 5 5.1 5.2 5.3 5.4 5.5 Taxation in Singapore Companies Individuals Expatriates Indirect Taxes Other Taxes 10 10 - 14 15 - 18 18 - 19 19 - 20 21 Appendices 1 2 3 4 5 Tax incentives Withholding tax rates Corporate tax rates Personal income tax rates Personal tax reliefs 22 - 28 29 - 30 31 32 33 Doing Business in Singapore 1 1.1 INTRODUCTION Geography and History The Republic of Singapore is located at the southern tip of the West...
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...must be subtracted from what you found for purchases). 7) That difference will be debited into Raw Materials and credited into Accounts Payable 8) When writing journal entries, go in this order: a) Purchases (from formula) b) Purchases (w/any stipulations) to A/P* b) Raw Materials Purchased c) Raw Materials to WIP d) WIP to Finished Goods e) Accounts Payable to Cash *All purchases of Raw Materials must be made on account for this to work 9) At the end of balancing these COGS accounts, pay off A/P with Cash (if stated in her assumptions for account activity) Assets : Accounts Receivable 1) Assign accounts to the questions 2) Draw T-accounts for A/R (or Trade A/R) and Allowance for Doubtful Accounts 3) All write-offs are credited from A/R and debited from Allowances (Notes - p.6 of Week 5) (p.319) 4) Treat the Allowance account like an Asset (if it’s in parentheses, it goes on Credit side of T account) 8) 5) When writing journal entries, go in this order: a) Sales (Starts with 0 on credit side of T-account) (If all sales made on account, debit A/R with the total Sales amount) b) Accounts Receivable (write-offs) b) Allowance...
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...National Green Technology Policy. Various attractive incentives are given to businesses to encourage the generation of renewable energy (RE) such as biomass, biogas, hydropower and solar power, and the efficient use of energy (EE). Conservation of energy is a promoted activity under the Promotion of Investments Act of 1986, companies providing EE services or companies that incur capital expenditure for conserving energy for own consumption can be considered for the Pioneer Status or the Investment Tax Allowance. Besides, for companies who intend to implement Power Quality Improvement Projects can apply for Accelerated Capital Allowance (ACA). On top of these, income received from the sale of certified emission reduction would be exempt from income tax. Incentives Available to Companies Adopting RE/EE Initiatives: a) Pioneer Status: Exempt from income tax on 100% of statutory income for 10 years. Accumulated losses and unabsorbed capital allowance incurred during the pioneer period can be carried forward to offset against the subsequent pioneer income of the company; or b) Investment Tax Allowance: Capital expenditure incurred on buildings, plants and machineries used for the RE/EE activities can be utilized against 100% of statutory income for a...
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...The Statement of Cash Flows Purpose of a statement of cash flows: To provide information about the cash inflows and outflows of an entity during a period. To summarize the operating, investing, and financing activities of the business. The cash flow statement helps users to assess a company’s liquidity, financial flexibility, operating capabilities, and risk. The statement of cash flows is useful because it provides answers to the following important questions: Where did cash come from? What was cash used for? What was the change in the cash balance? Specifically, the information in a statement of cash flows, if used with information in the other financial statements, helps external users to assess: 1. A company’s ability to generate positive future net cash flows, 2. A company’s ability to meet its obligations and pay dividends, 3. A company’s need for external financing, 4. The reasons for differences between a company’s net income and associated cash receipts and payments, and 5. Both the cash and noncash aspects of a company’s financing and investing transactions. What can we learn from SCF that is not already available in the other financial statements? It provides answers to important questions like: Where did cash come from? ...
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...The Statement of Cash Flows Purpose of a statement of cash flows: To provide information about the cash inflows and outflows of an entity during a period. To summarize the operating, investing, and financing activities of the business. The cash flow statement helps users to assess a company’s liquidity, financial flexibility, operating capabilities, and risk. The statement of cash flows is useful because it provides answers to the following important questions: Where did cash come from? What was cash used for? What was the change in the cash balance? Specifically, the information in a statement of cash flows, if used with information in the other financial statements, helps external users to assess: 1. A company’s ability to generate positive future net cash flows, 2. A company’s ability to meet its obligations and pay dividends, 3. A company’s need for external financing, 4. The reasons for differences between a company’s net income and associated cash receipts and payments, and 5. Both the cash and noncash aspects of a company’s financing and investing transactions. What can we learn from SCF that is not already available in the other financial statements? It provides answers to important questions like: Where did cash come from? What was cash used for? What was the change...
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