Question Tag: Interest Computation

Search 500 + past questions and counting.
Professional Bodies Filter
Program Filters
Subject Filters
More
Tags Filter
More
Check Box – Levels
Series Filter
More
Topics Filter
More
  • 2 Marks

PT – Nov 2019 – L2 – Q1c – Corporate Tax Liabilities

Determines the amount of tax underpayment for Naab Ltd to be subjected to interest computation.

c) The following data is relevant to Naab Ltd tax affairs for 2018 year of assessment:

Self-assessment returns submitted:

Tax paid on self-assessment: GH¢1,000,000
Chargeable income: GH¢4,000,000
Actual Returns submitted:

Chargeable Income: GH¢6,000,000
Correct amount – Tax payable: GH¢1,500,000

Required:
What is the amount of tax underpayment to be subject to interest computation?
(2 marks)

Computation of underpayment to be subjected to

Therefore, underpayment subject to tax is 350,000
(2 marks)

  • 4 Marks

PT – Nov 2020 – L2 – Q1c – Tax Administration

Computes the interest payable on overdue tax liability for a specific period and tax rate.

The following tax outstanding is relevant to the records of Bobolibobo Ltd:

  • Amount: GH¢200,000
  • Period of tax outstanding: 6 months
  • Statutory rate (annual): 20%

Required:
Compute the interest payable and the total tax liability from the above.

Interest Payable:

Tax outstanding = GH¢200,000
Period = 6 months
Statutory Rate = 20%
Rate of Interest = 125% of statutory rate

Interest = Amount-Principal (1 + Rate/12) ^ 6
= 125% * 20% = 25%

Total Liability = 200,000 (1 + 0.25/12) ^ 6
= 200,000 (1 + 0.020833333) ^ 6
= 200,000 x 1.131694109
= GH¢226,338.83

Interest Tax = Total Liability – Principal
= GH¢226,338.83 – 200,000
= GH¢26,338.83

Take control of your business data with insight and in-depth understanding by taking this course. 

Services

Contact Info

  • +233203701923
    +233543919232
  • info@noohrabusiness.com

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope