Tax Book 2023

Chapter 30 Solved Past Papers Income Tax Numericals of ICMAP Stage IV - (2003 to 2018)

A / B x C = 1,431,400 / 8,812,000 x 600,000 (97,463)

Tax credit for investment in shares

Tax credit omitted by Finance Act, 2022 0

• Balance tax payable 1,333,937

Question. 4 Fall 2017

(a)

Fraz Clothing

Statement of Profit or Loss

For the year ended June 30, 2023

Rupees

Sales 53,100,000

Cost of sales 47,680,000

Gross profit 5,420,000

Administrative and seling expenses 2,600,000

Mr. Faraz, a sole proprietor of Faraz Clothing, is engaged in manufacturing of garments.

748___ Conceptual Approach to Taxes

Administrative and seling expenses 2,600,000

Financial chagres 1,190,000

Other charges 775,000

Other income 2,590,000

Profit before tax 3,445,000

The following informtaion is also available relating to the statement of profit of loss:

. Other charges include:

> The provision for bad debts is amounting to Rs. 33,000.

. Salary expenses include amounts of Rs.. 65,000 and Rs. 55,000 per month paid to Mr. Faraz and
his brother respectively included in administrative and selling expenses. His brother looks after the
administration and financial matters of the entity.

> Running and maintenance expenses of vehicle are amounting to Rs. 345,000. Use of

vehicle for personal purposes was approximately 40%.

. On August 19, 2022, a used machinery was imported from japan valuing Rs. 2,400,000.
Depreciation, at the rate of 15% was charged on machinery for the whole year and is included in
cost of sales.
. Financial charges in clude Rs. 90,000 pertaining to a vehicle obtained on lease from an approved
leasing company. The cost of vehicle was Rs. 1,450,000. Depreciation of Rs. 320,000 has been
included in the administrative and selling expenses. Lease rentals paid during the year amounted to
Rs. 290,000.

administration and financial matters of the entity.

. The assessed business losses of tax year 2019, brought forward in the tax year 2023, are
Rs.1,375,000. These include unabsorbed tax depreciation amounting to Rs. 655,000.
. Gifts and donations, included in administrative and selling expenses, include gifts to clients, gift to
his wife and donation to The Citizens Foundation amounting to Rs. 120,000, Rs. 45,000 and Rs.
375,000 respectively.

748___ Conceptual Approach to Taxes