Mr. A. Kiriama prepared the following profit and loss account for his business for the year ended
31 December 2017
Income
Sh. Sh. Sales 18,400,000
Discount received 600,000
Profit on sales of shares 100,000
Foreign dividends received 15,000
Foreign exchange gain 35,600
Insurance recovery on stolen stock 180,000
19,330,600
Expenditure
Purchases 12,800,000
Salaries 1,200,000
Audit Fee 45,000
Tax consultancy fee 30,000
Legal expenses 325,000
Licenses & Permits 64,000
Depreciation 145,600
Loss on sale of equipment 78,400
Bank Charges 44,200
Donations to a political party 50,000
Subscriptions 12,800
Repairs & Maintenance 174,200
Rent & Rates 150,000
Purchase of loose tools 90,000
Commission & brokerage tools 23,000 (15,232,700)
4,097,900
Additional Information:
1. Legal expenses comprise: Sh.
Employment contracts 5,000
Acquisition of trademark 80,000
Successful defense of a legal suit for breach of a trade contrac 200,000
Debt collection 40,000
325,000
2.
Subscriptions comprise:
Sh.
Chamber of commerce and industry
2,800
Child care international
8,000
Golf club membership
2,000
12,800
3. Repairs and maintenances expense includes Sh. 74,200 used for the renovation of a store.
4. Capital allowance were agreed with the tax authorities at Sh. 680,000.
Required:
Prepare the adjusted taxable profit or loss for Mr. A. Kiriama for the year ended 31 December 2017
(12 Marks)
Determine the tax payable (if any), from the computations in (i) above (2 Marks) Indicate the latest date for submission of tax returns by Mr. A. Kimiti. (2 Marks)