SOLUTION
1. Calculate taxes
Sao Do is producing 2 groups of products: One is NOT subject to SST and another is subject to SST.
Price excluding SCT&VAT + SCT(50%) + VAT(10%)
500 + 0 + 50 = 550
200 + 100 + 30 = 330
Price excluding VAT +
You cannot Price excluding
calculate VAT*10%
Deductible = Price
Input SCT including
directly VAT
from The amount payable of raw materials
purchases because of two reasons:
Price excluding VAT*(1+10%) = Price including VAT
1. You do not know how much of 480 mil you used to produce the goods subject to SCT.
Price excluding VAT = Price including VAT/(1+10%)
2. The amount of deductible input SCT is the amount of SCT of the input which is used to produced the
goods sold.
a) Value-added tax
Output VAT = [880/(1+10%)]*10% + 17*10% = 81.7 (mil dong)
Input VAT = (60%*800)*10% + 20*10% = 50 (mil dong)
VAT payables = 81.7 – 50 = 31.7 (mil dong)
b) SCT or SST (Special consumption tax = Special sales tax)
Output SCT = {330/[(1+10%)*(1+50%)]}*50% = 100 (mil dong)
Deductible Input SCT = 80 (mil dong) (Data number 10)
SCT payable =100 – 80 = 20 (mil dong)
c) Corporate income tax
Profit before tax = [880/(1+10%) – 100] – [(60%*800 -80)+45+21+19+20+(200-110) +1%*200*3
+15%*200*3/12 +3] + (17 – 18) = 87.5 (mil dong)
CIT = 87.5*20% = 17.5 (mil dong)
Why we add Changes in Inventory = (Beginning inventory – Ending inventory) when calculating
COGS? (It is 200 -110 in our problem 1)
(MATCHING PRINCIPLE) The above changes in inventory help to eliminate the current direct cost
attributable to the production but did not contribute to the creation of current revenue or include the
previous direct cost attributable to the production but contributed to the creation of current revenue.
2. INCOME STATEMENTS OF THE QUARTER 1
1. Sales
(Doanh thu) 700 = 880/(1+10%) - 100
2. Deductions
(Các khoản giảm trừ Doanh thu)
Sales discounts
(Chiết khấu thương mại)
Sales rebates
(Giảm giá hàng bán)
Sales Returns
(Hàng bán bị trả lại)
3. Net sales
(Doanh thu thuần) 700
4.Costs of goods sold
(Giá vốn hàng bán) 547 = (60%*800-80) +45 +12+(200-110)
5. Gross profit/loss
(Lợi nhuận gộp) 153 = 700 - 547
6.Financial income
(Doanh thu hoạt động tài chính) 0
7. Financial expenses
(Chi phí tài chính)
In which: Loan interest expenses
(Trong đó: Chi phí lãi vay) 13.5= 1%*200*3 + 15%*200/4
8. Selling expenses
(Chi phí bán hàng) 32.6 = 60%*21+20
9. General and administrative expenses
(Chi phí quản lý doanh nghiệp) 18.4 = 40%*21 + 7+3
10.Net operating profit/loss
(Lợi nhuận thuần từ hoạt động kinh doanh) 88.5 = 153 + 0 - 13.5 – 32.6-18.4
11. Other income
(Thu nhập khác) 17 (Disposal of fixed assets)
12. Other expenses
(Chi phí khác) 18 (Net book value of disposed assets)
13. Other profit/loss
(Lợi nhuận khác) -1 = 17 - 18
14. Profit/loss before tax
(Tổng lợi nhuận kế toán trước thuế) 87.5 = 88.5 -1
15.Corporate income tax
(Thuế thu nhập doanh nghiệp) 17.5
16.Profit/loss after tax
(Lợi nhuận sau thuế) 70 = 87.5-17.5
3. CASH FLOWS OF THE FIRST QUARTER
Items In the quarter
I.Cash inflows from: 546.7 = 528+18.7
352= 40%*880 (Receivables
from customers)
1.Sales 528 = 60%*880 Khoản phải thu khách hàng
2. Disposal of fixed assets 18.7 = 17*(1+10%)
II.Cash outflows from: 425.7
264 (Payables to suppliers)
1. Raw material purchases 264 =(60%*800*1.1)*50% Khoản phải trả người bán
2.Direct costs 45
3.Indirect costs 21
4.Outside purchasing services 22= 20*(1+10%)
2 (Accrued expenses)
5.Short-term loan interest 4 = 1%*200*2 Chi phí phải trả
7.5 (Prepaid expenses)
6.Long-term loan interest 15 =15%*200/2 Chi phí trả trước
7. Pay VAT 31.7
8. Pay SCT 20
17.5 (Payables to state budgets)
Thuế và các khoản phải nộp ngân sách
9.CIT nhà nước
10.Other taxes 3
Increases/Decreases in cash 121 = 546.7-425.7
Beginning cash and cash equivalents 310
Ending cash and cash equivalents 431 =310 + 121
4. BALANCE SHEET
ASSETS Beginning Ending balance
A. SHORT-TERM ASSETS
I. Cash and cash equivalents 310 431
III. Accounts receivable
1. Receivable from customers 110 462=110+352
IV.Inventories 200 110
V. Other current assets
1. Short-term prepaid expenses 7.5
B.LONG TERM ASSETS
II. Fixed assets
1. Tangible fixed asset
Historical costs 800 750=800-50
Accumulated depreciation (100) (87) = -[100 +19 – (50-18)]
TOTAL ASSETS 1320 1673.5
LIABILITIES AND OWNERS' EQUITY
A.LIABILITIES
I. Current liabilities
1.Short-term debts and loans 200 200
2. Payable to suppliers 120 384=120+264
4. Taxes and other obligations to the State Budget 17.5
6. Accrued expenses 2
II. Long-term liabilities
4. Long-term debts and loans 200 200
B.OWNERS' EQUITY
I.Basic owners' equity
1.Capital 800 800
10.Retained earnings 70 (Profit after tax)
TOTAL LIABILITIES AND OWNERS' EQUITY 1320 1673.5
CASH FLOWS STATEMENT (Direct method)
I. Cash flows from operating activities
1. Gains from sales of goods and service provisions and other gains 528 = 880*60%
2. Payments to suppliers -286 = - (264+22)
3. Payments to employees -66 = - (45+21)
4. Loan interests already paid -19 = - (4+15)
5. Payments for corporate income tax 0
6. Other gains
7. Other disbursements -54.7 =-(31.7+20+3)
Net cash flows from operating activities 102.3
II. Cash flows from investing activities
1. Purchases and construction of fixed assets and other long-term assets
2. Gains from disposal and liquidation of fixed assets and other long-term assets 18.7
3. Loan given and purchases of debt instruments of other entities
4. Recovery of loan given and disposals of debt instruments of other entities
5. Investments into other entities 0
6. Withdrawals of investments in other entities 0
7. Receipts of loan interests, dividend and profit shared
Net cash flows from investing activities 18.7
III.Cash flows from financing activities
1. Gains from stock issuance and capital contributions from shareholders
2. Repayments for capital contributions and repurchases of stocks already issued
3. Short-term and long-term loan received
4. Loan principal amounts repaid 0
5. Payments for financial leasehold assets
6. Dividend and profit already paid to the owners
Net cash flows from financing activities 0
Net cash flows during the year 121
Cash and cash equivalent at the beginning of the period 310
Effects of fluctuations in foreign exchange rates
Cash and cash equivalent at the end of the period 431
CASH FLOWS STATEMENT (Indirect method)
I. Cash flows from operating activities
1. Profit/ (loss) before tax 87.5
2. Adjustments
Depreciation of fixed asset 19
Provisions
Gain/ (loss) from foreign exchange differences
Gain/ (loss) from investing activities 1
Loan interest expenses 13.5
3. Operating profit before changes of working capital 121
Increase/ (decrease) of accounts receivable -352
Increase/ (decrease) of inventories 90
Increase/ (decrease) of accounts payable (excluding loan interests and CIT) 264
Increase/ (decrease) of prepaid expenses
Loan interests already paid -19
Corporate income tax already paid 0
Other gains
Other disbursements -1.7
Net cash flows from operating activities 102.3
(Other parts are the same as those of the direct method)
