CPT – Scope and income recognition

Homework
Question 1
Select direct expenses of production company ZAO "Polus" and underline them:
1. depreciation of production fixed assets;
2. depreciation of ether fixed assets;
3. 30% (10%) write-off of the cost of production assets;
4. amortization of intangible assets;
5. repair expenses;
6. medical insurance of production workers;
7. Cost of materials used in production;
8. wages and salaries of production workers;
9. property insurance;
10. business training expenses;
11. social contributions on salaries of administrative personnel;
12. advertising expenses;
13. wages and salaries of administrative personnel;
14. bad debt expense;
15. social contributions on salaries of production workers;
16. forex loss

Question 2.
Production company ABC had the following types of income/expenses:
cost of materials used in production
dividends paid to the parent company
interest accrued on bank loan;
free meals to employees provided for in their labour contracts
penalties paid to a customer for the breach of contract terms
recognized foreign currency exchange gain en accounts receivable expressed in
foreign currency
paid tax penalties to budget
shipped goods to customers
received a bank lean
paid sports club membership for employees.

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 CPT – Scope and income recognition
Homework
Required:
Classify all income/expenses to the following 4 categories:
A. Taxable income
B. Deductible expense
C. Exempt income
D. Non-deductible expense

Question 3
ZAO ABC sells goods. Revenue for 2013 year equated to 1 000 000 RUR, cost of sales – 500 000 RUR.
Expenses of ZAO include:

• Wages and salaries with related social insurance contributions – 100 000 RUR.
• Rent of sales premises – 200 000 RUR.
In the previous tax year ZAO ABC recognized a loss of 40 000 RUR. CPT rate – 20%.
Required: prepare base scheme for calculation of CPT.

Question 4
OOO “Alfa” manufactures and sells bakery. All income and expenses for the current year are presented
below (net of VAT).
Sales of bakery in 2013 year equated to 1 000 000 RUR.
For production of goods OOO “Alfa” used bitter, flour and other ingredients for 200 000 RUR. Moreover for
undue payment for supplies OOO “Alfa” had to pay a fine to its contractors in amount of 10 000 RUR.
Wages and salaries in 2013 year amounted to 300 000 RUR, related social insurance contributions – 78 000
RUR.
Depreciation of production equipment – 122 000 RUR. Rent of production premises – 130 000 RUR.
Moreover in 2013 year OOO “Alfa” received income of 130 000 RUR from placement of free cash in deposit.
In prior tax period OOO “Alfa” recognized financial loss of 100 000 RUR.
CPT rate – 20%.
Required: prepare base CPT calculation for 2013 year.

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 CPT – Scope and income recognition
Homework
Question 5
Select which of the following transactions are not subject to CPT:
A. Contribution to share capital of 2 000 000 RUR.
B. Loan received in amount of 1 500 000 RUR.
C. Prepayment received from customer for finished goods in amount of 30 000 RUR.
D. Company A leased rented warehouse to Company B where the latter made significant improvement
that is installment of elevator in amount of 450 000 RUR. At the end of rent period Company A
received the warehouse back along with new elevator.

Question 6 “Justified and confirmed expenses”

A. Payment for consulting services in amount of 60 000 RUR. There is no agreement for consulting
services and no act of service supply.
B. Payment for tourist trip of director and his wife. All supporting documents are available.
C. NBV of a van used in transportation of finished goods – 120 000 RUR, transferred free of charge to
another entity.
D. Cost of hotel in France for business trip of one of the employees – 3 000 EUR. Only check from the
hotel in French is available.
Required:
Fill in the table below:
Confirmed Justified Reduce taxable base
A
B
C
D

Question 7
LLC Beta sells 2 types of goods – A and B. Product A is purchased from other companies and sold with no
additional work upon it. Product B is produced on LLC Beta factory. The following information is available
in respect of 2 products.
Sales revenue: product A – 1 000 000 RUR, product B – 500 000 RUR.
Materials used in production of B cost 200 000 RUR. In 2013 year LLC Beta purchase product A for 600 000
RUR.
Wages and salaries of workers engaged in production of product B – 100 000 RUR, related social insurance
contributions – 30 000 RUR. Wages and salaries of employees engaged in sales of product A – 200 000
RUR, related social insurance contributions – 78 000 RUR.

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 CPT – Scope and income recognition
Homework
Depreciation of production equipment in 2013 year was 120 000 RUR, amortization of exclusive patent for
production of product B was 48 000 RUR. Depreciation of fixed assets used in sales of product A – 62 000
RUR.
Moreover LLC Beta had to pay additional transportation costs of 50 000 RUR for product A, and a fine to
suppliers of material used in making of product B – 10 000 RUR for undue payment.
As at the beginning of the year there were no balances both for product A and B. As at the year end 10% of
product A were recognized in balance sheet, and only 80% of product B were sold.
Required:
Calculate taxable income in the format presented below for each product separately and in total.
Present results in a form of the table.
Solution:
A B Total
Sales
Less Direct expenses
Materials
Purchase cost
W&S
SIC
Depreciation
Transport expenses
Less indirect expenses
W&S
SIC
Depreciation of selling
equipment
Amortization of
patent
Fine to suppliers
Total taxable income