Case Stimulus
Bluechips Nigeria Limited is a limited liability company incorporated in Nigeria in 2020 and has been in business for so many years. The following information has been extracted from the company's records for the year ended December 31, 2024:
N
Sales 150,000,000
Direct cost (22,500,000)
Gross profit 127,500,000
Other income 30,375,000
157,875,000
Administrative and other expenses (112,091,250)
Profit before tax 45,783,750
Additional information:
N
(i) Other income included:
Dividend (net) 5,650,540
Rent (net) 3,460,000
Interest on government securities 7,550,000
Interest on foreign placement 11,256,500
Gains on foreign exchange - Translation of domiciliary
account balance
1,480,500
80% of the interest on foreign placement was repatriated through
a government - approved channel.
(ii) Administrative expenses included:
N
Depreciation 1,850,000
Audit fees 2,150,000
Directors' remuneration 7,500,000
Legal expenses 5,570,050
Other operating expenses 15,800,850
(iii) Legal expenses comprised: N
Commission paid for debt collection 250,000
Legal cost of a tax appeal made by the company to the FIRS 1,750,000
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Share issue expenses 1,070,050
Retainership fee 2,500,000
(iv) Other operating expenses included: N
Value added tax on computer hardware 120,000
Rent paid in respect of accommodation rented for a
management staff of the company whose basic salary was
N2,400,000 per annum
3,600,000
Misappropriated funds by the Director of Finance 2,500,000
Defalcations by the Sales Clerk out of which, the company
recovered a sum of N200,000 under fidelity insurance
525,000
Loss on property, plant and equipment 150,000
Loss on foreign exchange on payment for importation of
inventory
500,000
(v) The company made donations to the following entities: N
Van Leer Nigerian Educational Trust 250,000
Kewa Limited 300,000
Paterson Zochonis Nigerian Technical Education Trust Fund 200,000
The Christian Church of Nigeria 100,000
AFP Foundation Limited 500,000
(vi) Total marketing expenses of N3,000,000 included: N
Corporate/promotional gift items 1,000,000
Corporate adverts 1,200,000
Facilitation of port operations when importing the
inventories for the company
800,000
3,000,000
(vii) Unrelieved loss brought forward 10,345,000
(viii) Agreed claimable capital allowance 2,850,000