Question 1
The profit before taxation of AAA Ltd for the year ended 31 st December 20X5 is as follows:-
Note $’000
Operating profit before the following items 11,000
Add: Tax-exempt dividend income 500
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11,500
Less: Depreciation of non-current assets 1 (800)
Development expenditure amortized 2 (700)
Provision for doubtful debts 3 (400)
Entertainment expense 4 (1,100)
Provision for retirement benefits 5 (600)
Donation to unapproved institutions (500)
Other expenses disallowed for tax (600)
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Net profit before taxation 6,800
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Notes:
1. Non-current assets (NCA)
Motor Industrial Plant & Furniture & Total ($’000)
Vehicle Buildings Machinery Fittings
Cost:
1.1.20X5
Balance b/d 5,000 5,000 4,000 2,000 16,000
Additions - - 2,000 1,000 3,000
Disposals - - (1,000) - (1,000)
---------------------------------------------------------------------------------------------
Balance c/d 5,000 5,000 5,000 3,000 18,000
---------------------------------------------------------------------------------------------
Accumulated depreciation:
Balance b/d 400 900 1,000 300 2,600
Charge 100 100 300 300 800
Disposals - - (200) - (200)
----------------------------------------------------------------------------------------------
Balance c/d 500 1,000 1,100 600 3,200
-----------------------------------------------------------------------------------------------
NBV (CV) 4,500 4,000 3,900 2,400 14,800
The profit before taxation of AAA Ltd for the year ended 31 st December 20X5 is as follows:-
Note $’000
Operating profit before the following items 11,000
Add: Tax-exempt dividend income 500
-----------
11,500
Less: Depreciation of non-current assets 1 (800)
Development expenditure amortized 2 (700)
Provision for doubtful debts 3 (400)
Entertainment expense 4 (1,100)
Provision for retirement benefits 5 (600)
Donation to unapproved institutions (500)
Other expenses disallowed for tax (600)
-----------
Net profit before taxation 6,800
------------
Notes:
1. Non-current assets (NCA)
Motor Industrial Plant & Furniture & Total ($’000)
Vehicle Buildings Machinery Fittings
Cost:
1.1.20X5
Balance b/d 5,000 5,000 4,000 2,000 16,000
Additions - - 2,000 1,000 3,000
Disposals - - (1,000) - (1,000)
---------------------------------------------------------------------------------------------
Balance c/d 5,000 5,000 5,000 3,000 18,000
---------------------------------------------------------------------------------------------
Accumulated depreciation:
Balance b/d 400 900 1,000 300 2,600
Charge 100 100 300 300 800
Disposals - - (200) - (200)
----------------------------------------------------------------------------------------------
Balance c/d 500 1,000 1,100 600 3,200
-----------------------------------------------------------------------------------------------
NBV (CV) 4,500 4,000 3,900 2,400 14,800
