21) Goodwill Ltd runs a Music Recording Studio in London prepared accounts for the year ended 31 March 2020. The following information is available: a) The operating profit for the year ended 31 March 2020 was 1,800,000 after deducting the following expenses: Depreciation of 100,000, Customers' Entertainment expenses of 2,000, and Staff entertainment of 1,000 1,000 penalty for not following the safety regulation 2,000 donation to National Charity, 200 for Local Charity and 1,000 to political Party. Also, the profit figure is after considering the following incomes: Interest Income 5000, Rental income 8,000 and Capital Gain by sale of warehouse 150,000 (see note no. c) b) On 1 April 2019 the tax written down values of the Main Pool (general Pool) of Goodwill Ltd was 40,000 Company purchased and sold the following plant and machinery during the year ended 31/3/2019. 10/04/2019 20/5/2019 Purchased Office Equipment Purchased Plant and Machinery 1,180,000 150,000 27/2/2020 2/3/2020 Purchased a car (CO2-125 gms per km) Sale of old machinery costing 12,000 10,000 8,000 c) On 10 September 2019 Goodwill Ltd sold a warehouse to Norm Ltd, an unconnected company, for 320,000 The warehouse was purchased by Goodwill Ltd on 20 April 2004 for 120,000 and incurred additional capital cost of 10,000 on December 2004. The Indexation Factor is as follow: April 2004 to Dec 2017 April 2004 to Sept 2010 0.702 0.735 Dec 2004 to Dec 2017 Dec 2004 to Sept 2019 0.562 0.592 d) Goodwill Ltd owns a building in Singapore and received 18,000 rental income from Singapore., which is after deducting 10% tax of Singapore. This income has not included in the profit and loss account. e) Goodwill Ltd received 20,000 Interest Income from Bank and 30,000 dividend from another UK company during the accounting period. These are in addition to the income specified in Profit and loss account. f) Goodwill Ltd had Trading loss of 20,000 for the year ended 31 March 2019. Required: To calculate the Capital Allowance, adjusted Trading Profit and TTP of the company for the year ended 31/3/2020. Also calculate the corporation Tax liability. Claim Double Taxation Relief for overseas income. List out the Steps: 1) Calculate Capital Allowance 2) Prepare Adjusted Trading profit (plus and minus) 3) Find out other Income to be included in TTP. Check whether it is possible to take as it is from profit and loss account. If yes, then include it in TTP. If no or any adjustment required for taxation purposes, then calculate that income separately (for example, Capital gain given in the profit and loss account is 150,000, which is calculated by Accountant using accounting rule. But we know for TTP purpose, the Capital gain calculation is different.) calculate Capital gain using indexation allowance and take to TTP. 4) Check any overseas income to be included in TTP. If yes, take it after grossing. And do not forget to claim DTR after calculating Corporation Tax