Adel: statement of profit or loss for the year to 30 April 2019 £ £ Gross Profit 342,000 Other Income Impairment trade losses recovered (previously written off) 950 Profit on sale of office 6,800 Building society interest 5,300 13,050 Expenses Depreciation 17,000 General expenses 74,000 Impairment losses (trade) 850 Legal and accountancy charges 1,720 Rent and rates 2,100 Repairs and renewals 27,600 Salaries and wages 53,200 Subscriptions and donations 7,380 Travel 11,100 (194,950) Net Profit 160,100 Notes 

(1) General expenses include the following £ Entertainment: staff 1,500 Entertainment: Suppliers 900 

(2) Repairs and renewals include the following £ Redecorating existing premises 650 Renovations to new premises to remedy wear and tear of previous owner (the premises were usable before these renovations) 850

 (3) Legal and accountancy charges are made up as follows: £ Debt collection service 350 staff service agreements 130 Tax consultant's fees for advice on tax efficient personal investments 100 60-year lease renewal 150 Audit and Accountancy 800 1,530 

(4) Subscriptions and donations include the following £ Donations under the gift aid scheme 5,500 Donations to a political party 600 Sports facilities for staff 400 Subscription to trade associations 250

 (5) Travel expenses include Adel's motoring expenses of £3,000. 30% of his use of his car was for private purposes. (

6) Capital allowances amounted to: 22,000 

Required: 

a) Compute Adel’s taxable trading profit for the accounting period to 30 April 2019. Start with the net profit figure given and you should indicate using zero (0) any items which do not require adjustment. 

b) If Adel does not have any other income in 2019/20, compute Adel’s Income Tax Liability.

Answer rating: 100% (QA)

a Net Profit 160100 Other Income Impairment trade losses recovered ... View the full answer