(a) Identify and explain instances when a capital statement may be required. (5 marks)

(b) Mr. Jamal has not been keeping proper books of account since the inception of the business in 2015. The following balances relate to Jamals business for the period 2015 to 2020.

	2015 Sh.	2016 Sh.	2017 Sh.	2018 Sh.	2019 Sh.	2020 Sh.
Leasehold Land Lorries (cost) Saloon cars (cost) Swimming pool Stocks Computers Bank account Business deposit account Treasury bills Investment debtors House mortgage Creditors Bank overdraft Interest on bank deposit Loss on sale of investments Gain on foreign exchange	15,000,000 5,000,000 2,000,000 800,000 1,200,000 500,000 400,000 2,200,000 3,000,000 200,000 - 340,000 20,000 10,000 150,000 50,000	15,000,000 7,000,000 2,000,000 800,000 2,300,000 500,000 300,000 2,200,000 3,000,000 150,000 - - 60,000 5,000 120,000 60,000	15,000,000 4,000,000 2,000,000 800,000 2,000,000 500,000 20,000 2,200,000 3,000,000 250,000 - - 80,000 8,000 - 40,000	15,000,000 3,000,000 2,000,000 800,000 1,800,000 400,000 20,000 2,200,000 4,500,000 300,000 7,000,000 400,000 120,000 7,000 - 30,000	15,000,000 6,000,000 2,000,000 800,000 1,800,000 400,000 20,000 2,200,000 4,000,000 280,000 7,000,000 - 160,000 6,000 200,000 20,000	15,000,000 6,000,000 2,000,000 800,000 1,400,000 400,000 20,000 2,200,000 3,000,000 520,000 7,000,000 - 200,000 3,000 160,000 10,000

Required:

Estimate the taxable income for each of the three years 2018, 2019 and 2020. (20 marks)

(TOTAL 25 MARKS