Johnson’s Hardware, a registered taxpayer, during the month of December purchased $100 000 of standard rate merchandise. During the same month cutlass costing $300 000 and taxable consulting services amounted to $90 000 was incurred respectively. The total sales inclusive of GCT for the month amounted to $1 500 000. All merchandise purchased was sold with a mark rate of 30%. Required: a. List four (4) obligations of Johnson’s hardware as a registered taxpayer. b. Differentiate between the following terminologies: i. tax avoidance and tax evasion ii. input and output tax iii. standard rated items and zero rated items. c. Compute the following for the month of December 2013 for Johnson’s hardware: i. total input tax ii. output tax iii. tax liability
Johnson’s Hardware, a registered taxpayer, during the month of December purchased $100 000 of standard rate merchandise. During the same month cutlass costing $300 000 and taxable consulting services amounted to $90 000 was incurred respectively. The total sales inclusive of GCT for the month amounted to $1 500 000. All merchandise purchased was sold with a mark rate of 30%.
Required:
a. List four (4) obligations of Johnson’s hardware as a registered taxpayer.
b. Differentiate between the following terminologies:
i. tax avoidance and tax evasion
ii. input and output tax
iii. standard rated items and zero rated items.
c. Compute the following for the month of December 2013 for Johnson’s hardware:
i. total input tax
ii. output tax
iii. tax liability
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