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Syntax limited reported a profit before tax of 150,000 cedis. The profit was arrived at after considering: provision for doubtful debt of 10000 cedis, Specific bad debt written off 2,000 cedis, depreciation 5000, financial gain 10,000, financial cost 30,000. Capital allowance of 5,000. Calculate the Adjusted Chargeable income of ABC limited?

A. 270,000 cedis
B. 170,000 cedis
C. 172.000 cedis
D. 190,000 cedis
E. 200,000 cedis

1 Answer

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Final answer:

The Adjusted Chargeable Income of Syntax Limited after adding back specific expenses and subtracting non-taxable income and deductible expenses, such as a capital allowance, is 182,000 cedis.

Step-by-step explanation:

The student is asking how to calculate the Adjusted Chargeable Income for Syntax Limited, which is a business accounting concept. To determine the Adjusted Chargeable Income, we start with the reported profit before tax of 150,000 cedis. From this, we add back the provision for doubtful debt (10,000 cedis), specific bad debt written off (2,000 cedis), and depreciation (5,000 cedis) because these are not expenses that reduce taxable income. After that, we subtract non-taxable income (financial gain of 10,000 cedis) and add non-deductible expenses (financial cost of 30,000 cedis). Finally, we subtract the capital allowance (5,000 cedis), which is a deductible expense for tax purposes, from the resultant figure. Thus, the Adjusted Chargeable Income calculation follows as: 150,000 + 10,000 + 2,000 + 5,000 - 10,000 + 30,000 - 5,000 = 182,000 cedis.

User Mauro Baraldi
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