FIELD: BUSINESS, FINANCE, AND MANAGEMENT (BFM)

TIME ALLOWED: 03 HOURS

SPECIALTY: ACCOUNTANCY (ACC)

CREDIT VALUE: 6

PAPER; Tax Accounting

COURSE CODE: ACC17

INSTRUCTIONS TO CANDIDATES
 This paper carries four sections
 You are required to attempt all the questions
 Only non-programmable calculators and OHADA charts of accounts are authorised

SECTION A: taxation principles/10 marks

1. Taxes might be levied on income, on capital or on expenditure. Taxes are classified either on basis of
tax base or the manner in which the tax is paid to the state. State the two classes of taxes as per the
manner of the payment to the state.

2. Distinguish between the following terms used in taxation. The tax bearer and taxpayer.

3. State the two main functions and purposes of taxes.

4. According to the economist. Adam Smith, governments have policies. State them.

5. State the tax assessment systems in Cameroon on the basis of the turnover realized by the business.

6. What do you understand by VAT Credit?

7. Who are those natural or artificial persons responsible for payment of Liquor License?

8. State the domain of taxpayers paying company tax at the reduced principal rate of 15%.

9. ABC Co.Ltd earned an interest of 200 0000FCFA on one of her savings accounts in Union Bank of
Cameroon as indicated on the bank statement received on the 10/01/2022. What is the flat tax rate on
income from financial assets?

10. From question 9 above, determine the tax on income from securities to be deducted at source.

SECTION B: the value added tax, excise duties and custom duties/25 marks

The following figures in CFAF are extracted from the books of a trading business registered for VAT for the
first semester of the 2021 financial year.

periods Purchases (excl. VAT) Sales (excl. VAT)

January 2021 4 676 000 5 500 000
February 2021 4 450 000 6 000 000
March 2021 3 250 000 5 820 000
April 2021 4 500 000 2 800 000
May 2021 4 300 000 6 500 000
 June 2021 4 000 000 3 800 000
All the supplies are taxable supplies.

Required:

i. Using schedule compute the VAT due or VAT credit for each period and present the VAT
declaration and payment. (10 marks)
ii. Journalise the declarations and payments given that VAT due are usually paid in cash on the last
day of the liability period. (15 marks)

SECTION C: COMPANY TAX/30 MARKS

1. Marx plc has as reporting date 31 December. For the year ended 31 December 20X9 with a profit
before tax (accounting profit) of 16 420 000 CFAF. The fiscal check reveals the following:

i. Sales to Hoga for 5 400 000 CFAF were recorded as 4 500 000CFAF.

ii. The accountant forecasted and recorded the December month electricity consumption for 1 200 000
CFAF while the corresponding bill received in early January 20X9, showed a figure of 800 000
CFAF.

iii. As at 31 December 20X9, Marx Plc had not received the credit advice form Union Bank for interest
to the favour business. The receivable interest stood at 850 000 CFAF.

iv. The book of accounts showed salary paid to Miss Tita for 1 400 000CFAF for the year. The payroll
department is unable to justify that this salary corresponds to effective work.

v. In computing the December month salary, a power failure impaired the payroll system which
released payable salaries of 18 600 000 CFAF. After a complaint by the affected salaried workers,
it was noticed that the actual amount of salaries was 21 900 000 CFAF.

vi. It was discovered that sales invoice no 789 to Bino amounting to 4 500 000 CFAF was recorded
twice.

vii. A recent fiscal measure by the Ministry of Finance exempts dividends of 3 600 000 CFAF earned
from an environmental company in which Marx Plc hold shares.

viii. Purchase invoice no 5678 of 2 500 000CFAF for businesses which are able to realize an annual
turnover of at least 50 000 000 CFAF. Marx Plc had a turnover of 72 000 000 CFAF for the year
20X9.

Work to do: Determine the fiscal net income. (10 marks)

2. A Plc registered under the actual earnings system of taxation, realized an accounting net income of 12
572 426 CFAF (net profit before tax) for the 2021 fiscal year ended. The expenses on ordinary and
extraordinary activities amount to 41 075 420 CFAF. The revenues from ordinary and extraordinary
activities amount to 53 647 864 CFAF on an annual turnover of 49 026 770 CFAF. After the fiscal
analysis of expenses, it appears that 34 820 000 CFAF represent fisaclly deductible expenses. More to
that, revenues amounting to 2 520 400 CFAF should be exonerated from tax.
Required:

i. Calculate the taxable profit. (5 marks)

ii. What is the amount of the tax to be paid? ( 5 marks)
iii. What is the amount of the net profit for appropriation? (5 marks)
iv. Show the journal entries relative to the company tax, including the payments of advance on tax realized
during the fiscal year in the form of a single entry for simplification and the payment of the balance on
the company tax by UBA bank cheque on the 10 March 2022.( 5 marks)
SECTION D: PERSONAL INCOME TAX/15 MARKS

Finance House Yaoundé has invested in 100 ordinary shares of ABC C o. Ltd. The nominal value of these share
stands at 20 000 CFAF each. The Directors of ABC Co. Ltd have declared a gross interim dividend of 5 780
CFAF per ordinary share for the first quarter of the 20X9 financial year.

Required:

1. Determine the income tax on the interim dividend and the net dividend payable by ABC C o. Ltd.(7
MARKS)
2. Present the journal entries given that the declaration is done on the 5 th of April, the dividend is paid on
the 15th of April by BICEC bank transfer, credit and debit advices N os 1234 and 5678 respectively and
the tax is paid 15 days later.(8 MARKS)

SECTION E: TAXATION OF ACTIVITIES AND CAPITAL

1. Calculate the amount payable at the start of this year for the business license of a large business which
made a turnover of 1 200 000 000 CFAF last fiscal year.(10 MARKS)
2. What is the amount of the liquor licence that should be paid by a Kumba based trader selling alcohol
drink with a turnover of 22 000 000 CFAF for the previous trading period? Show the accounting entry
of the business licence certificate, liquor licence inclusive assuming that the payment is done by bank
cheque. (10 marks)