Taddeo Ltd is a resident manufacturing business in Nairobi, Kenya. The following are extracts from its financial statements for the year of income ending 31 December 2020.Kshs “000” 

Profit for the year ........................................ 35,783,000

Expenses deducted before arriving at the profit for the year

Depreciation ..................................................4,567,800 

Directors’ remuneration.....................................675,000 

Salaries and wages ...........................................897,540 

General expenses..............................................568,000 

Auditor’s fees....................................................456,000 

Reserves .......................................................2,135,000 

Bad debts reserve .............................................890,000 

Taxes ...............................................................132,890 

Interest on loan ................................................975,870 

Manufacturing expenses.................................8,965,000 

Supplies used ................................................1,215,600 

Commissions paid .............................................375,000 

Provisions for dividends..................................1,230,000 

Fire insurance............................................. 178,09023,261,790

Additional information

a) Profit on sale of shares ex-dividend included as income 1,240,000,000

b) Bad debts (specific) are Kshs 670,000,000

c) Taxes represent VAT paid

d) General expenses include donations of Kshs 200,000,000

e) At the beginning of the year 2020, company had estimated it tax liability at Kshs 2,000,000f) The company owned the following fixed assets acquired during the years indicated:-Kshs “000" year

Manufacturing building 1 ........................ 30,000,000............. 2019 

Manufacturing plant 1 ............................ 17,800,000............. 2019 

Manufacturing building 2 ........................ 40,000,000............. 2020 

Manufacturing plant 2 ............................ 23,000,000............. 2020 

Motor vehicle [commercial].......................4,500,000............. 2020 

Computers and accessories.......................2,050,000............. 2019 

Furniture and fittings................................3,042,800............. 2019

Required

i) The capital allowances claimable by the company for the years 2020

ii) The adjusted taxable income/loss for the year of income

iii) The tax payable (if any)

iv) The date(s) when tax was payable by the company and the relevant amounts

v) Ways the company could have improved its tax position [ any 3 ways]

Answer rating: 100% (QA)

Question 1 Capital allowances claimed by the Company 2020 Purchased 4000000023000000 450... View the full answer