3 Question 2 Jacob Limited, a private company, manufactures doors, windows, and fencing. The company had a profit before tax of $89,000,000 for year ended December 31, 2021 after charging/ (crediting) the following: Depreciation Preference dividends paid (note 1) Repairs and improvements (note 2) Bad debt expense The following additional information has been provided: The company has the following capital structure: Ordinary paid up shares of $1 each 10% Preference Shares $16,000,000 7,800,400 900,000 3,800,000 12,450,000 $9,000,000-3500 2. The figure of $3,800,000 for repairs and improvements includes $2,500,000 for fencing part of the business property and $1,300,000 for repairing the doors at the payable of end rec. sturd business place. 3. The bad debt expense includes an amount of $3,550,000 for a loan provided to an employee who subsequently left the company. calculate ETC 4. Capital allowances calculated are as follows: Initial Allowance: $2,560,000 Annual Allowances: $6,530,280 Balancing Charges: $250,000+ Donations allowable amounted to $150,000. 6. Included in revenue are: (i) profits from sale of fixed assets - $1,500,000; less dividend incomes of $250,000 received from a company resident in St. kss Lucia (iii) Interest income of $450,000 Withholding taxes from interest income is $112,500 x liability 8. The company employs 40 persons who are all full-time workers. The company filed and paid the following payroll taxes on time for 2021: PAYE S 26,000,000.00 Other statutory deductions (Employer & Employee portions) 8,960,000.00 9. The company has brought forward losses of $65,000,000 from December 2020 Aide for loss 10 The company is also entitled to the MSME Income Tax Credit of $375,000. After liability 11. The company paid estimated taxes of $2,650,000 in 2020. nife due and sayable Required: a) Calculate Jacob's Limited taxes due and payable and effective tax rate for December 31, 2021 (17 marks) b) What is the difference between the statutory tax rate and the effective tax rate. Explain what accounts for some of the differences between the two. (3 marks)