You have recently graduated with a Post Graduate Diploma in Accounting and Finance and work in a practice in Dublin. Abdul Karim, aged 50 and an engineer, has been a client of the practice for many years.
accounting
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QUESTION 1 (a) You have recently graduated with a Post Graduate Diploma in Accounting and Finance and work in a practice in Dublin. Abdul Karim, aged 50 and an engineer, has been a client of the practice for many years.
In 2014, Abdul started his own business as a sole trader, which he called SYSTEMS. He has been very successful but is concerned about the high levels of income tax he must pay.
The latest Statement of Financial Position as at 31 December 2018 shows the business to
have net assets of €285,000. Just last week, one of the business’ main customers offered
Abdul €500,000 for the business. He was pleased to learn that SYSTEMS, his sole trade
business was worth €500,000. However, Abdul declined the offer as he wants to grow the
business further himself.
