Taxation Fall 2025 - Mid Term

Trimester: Fall 2025 Time 1:30 Hours course Code: ACT 408 Section: A Daffodil International University Faculty of Business & Entrepreneurship Department of Business Administration Program: BBA Examination : Midterm Full Marks: 25 Course Title: Business Taxation Teacher: NRI Instruction: Answer all the questions Question 01 : (a) How would you define Advance Lncome Tax (AIT)? Explain the process of computing advance tax for old and new companies. (b) The corporate taxrate for Non- publicly traded company is usually higher than the publicly traded company. Do you think it is justifiable? Whyor why not? CLO 1 Level 2] [Marks: 3+3= 61 Question- 02: Ashraftzzaman & Associates is a pannership F irm where Nfr_ Ashraf and Nfr_ Zaman are partners in the ratio of The profit and loss account for the just completed year is shoun below- Ashraålzzaman and Associates Profit and Loss Statement For the ear ended on 30th June 2025 Particulars Office rent Utilities Commission Advertising Mi scellaneous expense Legal expense Depreciation expense Doubtful debt Repairs Interest on capital-Farhan-7,000 Ashraf-7,ooo Zaman-6,OOO S alaries: Farhan-24,OOO Zaman- 22,000 Net profit Total Amount Particulars 75,000 20,000 90,000 15,000 20,000 10,000 3,000 124,000 20,000 46 ooo 17.27,ooo Gross Profit Share premium Other Income Amount 2200.000 1.782000 Other information: Rent includes Tk 15 ,000 paid to rvfr Ashraf who partially ouns the business premises. Tk 12,000 of commission is given to Nfr_ Zaman for his special assignment. 25% of repairs was paid for purchasing an equipment and miscellaneous expense includes a donation of Tk 78,000 to a charitable govt. hospital Tax depreciation was Tk. 12,000. The firm has a commercial building which has been let out for Tk. per year although the Municipal value of the building is Tk. per year. The firm claims some investrnent allowance including donation to Govt. Zakat åmd Tk. 2, 10, 000, contribution to the Farmers Association of Bangladesh Tk and purchase of Sonchoypatra Tk in this year. [Please see the next page] Mr. Ashraf has no other sources of income but Farhan and Nfr Zaman were also partners in another firm named Qubic associates and during the year the amount of profit or (loss) from this firm includes Farhan (25,000) and Nfr Zaman 435,000 Required: (iii) (iv) Compute the taxable income of Ashrafuzzaman and Associates (ii) Compute the amount of tax liability of the firm. Show the amount of distributions to the panners Compute the amount ofnet tax liability of the partners [CLO 2 Level 3] [Marks: 09] Question-03: The Profit and Loss Account of S6na1i Enterprise for the year ended on June 30, 2025 is given below. Particulars Directors remuneration Salaries and wages Contribution to provident ffnd Rent and taxes Repairs and operating expenses Electricity Legal expens Audit fees Printing, stationery, & postage Compensation for staff termination Purchase of typelvriter sement Entertainment Provision for bad debt Depreciation Net profit Additional Information to be considered: 3,462000 108,800 1,242500 77,300 47,500 38,000 14,500 55,800 10,000 55,948 14,200 42400 46,600 52 700 Particulars Gross profit Dividend income Share premium Sundry income 330,000 430,000 2.132000 Rent and taxes included VAT of Tk. 25,000 which was actually paid for importing a machine. Legal expenses were incurred for income tax appeal Directors: remuneration includes Tk 1 salary to the directors of the company. An old Photocopier machine was purchased during the year for Tk. 75,000 which has been included with the printing, stationary and postage. This is a trading company listed in the Dhaka Stock Exchange and Chattogram Exchange and during the year company's sales proceeds were Tk. 1, although the company had to face different political and other instability _ The Pro\ident åLnd of the company is not recognized by NBR and the tax depreciation for the year is Tk. 63,000 Required: Examine the above statement to determine taxable income and tax liability of the company. [CLO 3 Level 4] [Marks: 101