Question 2
ICAN
•
2024
•
TAXATION
•
mixed
Case Stimulus
Adidas Nigeria Limited has been in business for so many years. The company is into supply of furniture, fixtures and fittings. Since the date of commencement of business to the accounting year ended October 31, 2018, it had posted reasonable profits. In year 2019, a competitor, ABC Limited, was able to introduce a new brand of furniture into the market, which boosted the sales of the company. Unfortunately, this had an adverse effect on the gross turnover of Adidas Nigeria Limited. Despite concerted efforts made by Adidas Nigeria Limited to compete favourably with ABC Limited, its fortunes continued to dwindle. To allow for capital injection, the directors of Adidas Nigeria Limited, decided on February 1, 2020, to change its accounting date to be in line with one of its foreign partners. The board, therefore, decided that the accounting year-end be changed to December 31, every year.
Additional Information
{
"label": "(i)",
"content": "Adjusted profits Year ended October 31, 2019 24,500,000 Period ended December 31, 2020 (14 months) 38,200,000 Year ended December 31, 2021 44,100.000"
}
{
"label": "(ii)",
"content": "Gross turnover Year ended October 31, 2019 49,100,200 Period ended December 31, 2020 75,200,500 Year ended December 31, 2021 101,300,000"
}
{
"label": "(iii)",
"content": "Capital allowances Assessment year 2020 850,000 Assessment year 2021 720,000 Assessment year 2022 600,000"
}
Requirements
(
a
)
Compute the assessable profits
(
b
)
Compute the company’s income tax liabilities
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About This Question
This is
Ican
2024
Taxation
Question 2.
It is one of the
mixed
questions from the
2024
Ican
Taxation
examination.