ACCT 422 SEU Tax and Zakat Calcuations Questions

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College of Administration and Finance Sciences
Assignment (3)
Deadline: Saturday 30/4/2022 @ 23:59
Course Name: Tax and Zakat Accounting
Student’s Name:
Course Code: ACCT 422
Student’s ID Number:
Semester: 2nd
CRN: 23081
Academic Year: 1443 H
For Instructor’s Use only
Instructor’s Name: Dr. Mohammed Arshad Khan
Students’ Grade:
/10
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
• The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be
reduced for poor presentation. This includes filling your information on the cover
page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or
other resources without proper referencing will result in ZERO marks. No exceptions.
• All answers must be typed using Times New Roman (size 12, double-spaced) font.
No pictures containing text will be accepted and will be considered plagiarism.
• Submissions without this cover page will NOT be accepted.
College of Administration and Finance Sciences
Assignment 3
Q.1- Mr. A and Mrs. B are married and have two dependent children. X & Y, They also fully support
Mrs. B’s mother who lives with them and has no income. Their 2012 tax and other related
information is as follows: (2.5 marks)
Particulars
Amount in $
Value of premiums for $ 100000 of group term life insurance provided by employer
2,000
Gift from A’S parents
60,000
Dividend income—from ABC stock,
8,000
Loan from A’S parents
20,000
Total salaries
640,000
Bank account interest income
14,000
Gain from the sale of qualified small business stock acquired in 2010
60,000
Total itemized deductions
64,000
Municipal bond interest income
6,000
Value of employer provided medical insurance
22,000
Required: Compute Mr. A and Mrs.B Taxable income. (Show all calculations in proper /good form.)
Solution:
College of Administration and Finance Sciences
Q.2- Mr. Abdullah’s medical and personal expenses include the following: (2.5 mark)
Particulars
Prescription drugs
Eyeglasses
Doctors’ fees
Hospital fees
Food for personal use (expenses)
Travel allowances
General purpose vitamins
Medical premiums
Visitors fees
Recreation fees
Club fess
Amount in $
2,400
1,400
8,000
13,400
4,000
10,000
400
43,400
2,000
5,000
2,000
Abdullah’s AGI for the year is $ 132,000. He is single and age 56. Insurance company reimburses
none of the medical costs and other related items.
After considering the AGI floor, what will be Abdullah’s medical expense deduction?
Answer:
College of Administration and Finance Sciences
Q.3 In the year 2013, PQR Corporation had the following items of income, expense, gains, and
losses: (2 mark)
Particulars
Sales
Account payable
Interest on savings account
Plant & Machinery
Equipment
Operating expenses
Furniture and Fixture
Gain on sale of AT&T stock
Loss on sale of IBM stock
Building
Motor vehicle
Cost of sales
Amount in $
2,000,000
600,000
56,000
600,000
300,000
400,000
400,000
24,000
60,000
400,000
200,000
1,080,000
What is taxable income of PQR Corporation’s for the year?
Answer: –
Q-4-To make income taxable, income must be realized and recognized. Explain in your own words
the difference between income realization and income recognition, and then provide a short
numerical example to indicate the difference (Don’t copy the same numerical example from other
students. Numerical example must be differ). (2 mark)
Answer
College of Administration and Finance Sciences
Q5. If a NOL (net operating loss) is incurred, when would a taxpayer elect to forgo the carryback
period and only carry the loss deduction forward? (1 marks)

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Tax and Zakat

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