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 + Price excluding VAT*10% = Price including VAT
Price excluding VAT*(1+10%) = Price including VAT
Price excluding VAT = Price including VAT/(1+10%)
You cannot calculate Deductible Input SCT directly from The amount payable of raw materials
purchases because of two reasons:
1. You do not know how much of 480 mil you used to produce the goods subject to SCT.
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)
2. INCOME STATEMENTS OF THE QUARTER 1
[Link] add Changes in Inventory = (Beginning inventory – Ending inventory) when calculating
Sales
COGS? (It isthu)
(Doanh 200 -110 in our problem 1) 700 = 880/(1+10%) - 100
2. Deductions
(MATCHING PRINCIPLE) The above changes in inventory help to eliminate the current direct cost
(Các khoản giảm trừ Doanh thu)
attributable to the production but did not contribute to the creation of current revenue or include the
Sales discounts
previous direct cost attributable to the production but contributed to the creation of current revenue.
(Chiết khấu thương mại)
For Sales rebates
example: You are a shop who sells laptops.
(Giảm giá hàng bán)
Beginning inventory: 0
Sales Returns
The (Hàng
shop hadbánbought:
bị trả lại)
100 laptops at 15 mil dong per unit (excluding VAT)
[Link],
Netthe
sales
shop sold 40 laptops at 20 mil dong per unit (excluding VAT)
(Doanh thu thuần) 700
Ending inventory:
[Link] (100sold
of goods – 40)*15 = 60*15
(Giá vốn hàng bán) 547 = (60%*800-80) +45 +12+(200-110)
COGS = 100*15 +(0 – 60*15)
5. Gross profit/loss
It is (Lợi nhuận
correct 153sold.
gộp)it is the cost of 40 laptops which were
because = 700 - 547
[Link] income
(Doanh thu hoạt động tài chính) 0
7. Financial expenses
Why(Chi
we eliminate deductible input SCT which is 80 (NOT SCT amount on the invoice which is 120)
phí tài chính)
fromInThe totalLoan
which: amount payable
interest of raw material purchases to domestic suppliers excluding VAT
expenses
which is 480
(Trong đó:when
Chi calculating
phí lãi vay)COGS? 13.5= 1%*200*3 + 15%*200/4
8. Selling expenses
Because the inventory is recorded by the price including SCT.
(Chi phí bán hàng) 32.6 = 60%*21+20
For 9. General and administrative expenses
example:
(Chi phí quản lý doanh nghiệp) 18.4 = 40%*21 + 7+3
A producer
[Link] imported
operating 1000 liters of liquor and paying an excise tax (SCT: Special consumption tax)
profit/loss
amount
(Lợiofnhuận
VND thuần
40 thousand perđộng
từ hoạt liter kinh
upon doanh)
importation (based
88.5 =on153
the receipt of excise
+ 0 - 13.5 tax payment at the
– 32.6-18.4
stage11.
of Other
importation).
income The price including SCT is VND 120 thousand per liter.
(Thu nhập khác)
+ Beginning inventory: 0 17 (Disposal of fixed assets)
12. Other expenses
+ Inventory
(Chi phí(price 18 (Net
khác) including SCTG) increased to 1000*120 = VNDbook valuethousand
120,000 of disposed assets)
13. Other profit/loss
+ Exwarehousing 400 liters of liquor to produce 400 bottles
(Lợi nhuận khác) -1 =of17liquor.
- 18
14.400
+ Sold Profit/loss
bottles ofbefore
liquor. tax
(Tổng lợi nhuận kế toán trước thuế) 87.5 = 88.5 -1
Ending inventory
[Link] income(price
tax including SCT):
120,000
(Thuế thousand
thu nhập doanh dong – 400*120 thousand dong
nghiệp) = 72,000 thousand dong
17.5
[Link]/loss
+ SCT in the invoiceafter tax = 40,000 thousand dong
= 40*1000
(Lợi nhuận sau thuế) 70 = 87.5-17.5
+ Deductible SCT = 40*400 = 16,000 thousand dong
Two approaches to calculate COGS (ignoring the direct labor cost and other related costs):
1st approach: COGS = [1000*120 - 16,000 + (0 -72,000)] = 32,000 thousand dong
2nd approach: The price of one liter of liquor excluding SCT = 120 -40 =80 thousand dong
3. CASH FLOWS OF THE FIRST QUARTER
Items In the quarter
[Link] inflows from: 546.7 = 528+18.7
352= 40%*880 (Receivables
from customers)
[Link] 528 = 60%*880 Khoản phải thu khách hàng
2. Disposal of fixed assets 18.7 = 17*(1+10%)
[Link] outflows from: 425.7
264 (Payables to suppliers)
1. Raw material purchases 264 =(60%*800*1.1)*50% Khoản phải trả người bán
[Link] costs 45
[Link] costs 21
[Link] purchasing services 22= 20*(1+10%)
2 (Accrued expenses)
[Link]-term loan interest 4 = 1%*200*2 Chi phí phải trả
7.5 (Prepaid expenses)
[Link]-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
[Link] nhà nước
[Link] 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
[Link] 200 110
V. Other current assets
1. Short-term prepaid expenses 7.5
[Link] 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
[Link]
I. Current liabilities
[Link]-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
[Link]' EQUITY
[Link] owners' equity
[Link] 800 800
[Link] 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
[Link] 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)