Noodle Nation Limited (NNL) is a New Zealand tax resident company that operates a chain of noodle restaurants throughout the South Island. NNL has a standard 31 March balance date and is registered for GST.

The company recorded an accounting profit before tax of $2,150,000 in its management accounts for the income year ended 31 March 2024. You work for Spotlight Accounting Limited, and your task is to prepare the tax reconciliation to determine NNL's taxable income so that you can later prepare its income tax return.

The company's internal accountant has provided the following additional information relating to NNL's operations for the income year ended 31 March 2024:

1. Included in NNL's balance sheet is an amount of accrued interest income as at 31 March 2024 of $15,000. The balance of the accrued interest income as at 31 March 2023 was $11,000. Ignore the impact of the financial arrangements rules (if any).

2. The annual rental cost for a new restaurant in Wanaka is $24,000. On 1 October 2023, NNL prepaid the full year of rent to 30 September 2024 in advance. This payment was expensed in the management accounts.

3. On 20 March 2024, NNL's Christchurch restaurant acquired a new deep fryer for $900. This was entered in the accounting system as a fixed asset so it was not included in the accounting profit or loss. No depreciation was claimed for accounting purposes.

4. Entertainment expenses included in accounting profit totalled $3,500. Of this, $3,000 related to food and drink at staff functions that were not on the business premises. The remaining $500 related to food and drink consumed by one of NNL's directors while travelling out of town to meet with suppliers. The director did not eat or drink with the suppliers.

5. NNL's Queenstown restaurant sometimes prepares catering orders for local businesses and events on credit arrangements for up to 60 days. One of its customers ordered $1,000 worth of catering in June 2023, but by December 2023, it had gone into liquidation with the debt unpaid. NNL's internal accountant wrote off the debt as bad in January 2024, and this was included in the management accounts.

Required: Calculate NNL's taxable income for the year ended 31 March 2024 by preparing a reconciliation from accounting profit to taxable income, identifying the required tax adjustments. Assume that NNL wishes to minimise its taxable income.

Briefly explain the income tax treatment of items 1, 2, 4 and 5 (even if the adjustment is nil). For items 3 and 5, cite a relevant legislative reference. Refer to Income Tax 2007 for it https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM1512301.html