a) Mr. Tipis is employed as the an Accountant at Kiwerek Limited. He has provided the following information relating to his income for the year ended 31 December 2020: 1. Basic salary of Sh.200, 000 per month. (Monthly PAYE was Sh.40, 000). 2. He was given an annual clothing allowance of Sh, 101,000 for purchase of office attire appropriate for his position. He also earned a monthly allowance of Sh.2,500 for attending meetings from 1 April 2020 to the end of the year. 3. The company provided him with a saloon car of 3,000cc. The car had cost the company Sh.3,000,000 in 2012. Depreciation policy on motor vehicles is at the rate of 100% per annum on cost. 4. He was provided with a company house leased at Sh.45, 000 per month. A nominal rent equivalent to 12% of his monthly basic salary was deducted by the company to cater for the rent. 5. The education fees for his two daughters amounting to Sh.130,000 were paid by the company during the year. This amount was charged to the companys income statement. 6. Mr. Tipiss has a life insurance policy for self and family for which he pays total annual premiums of Sh. 250,000. 7. He contributed Sh.35, 000 per month towards a registered pension scheme. 8. His private telephone charges averaging Sh.2,500 per month were paid by the company. 9. He earned interest income of Sh,250.000 during the year from his investments in housing development bonds. 10. In the month of November 2020, he received abonus of Sh.75, 000 from the employer for good performance. 11. Mr. Tipis reported a gross income of Sh.900, 000 for the year ended 31 December 2020 from his retail shop. This was before deducting the following expenditure: Sh. Water & Electricity 200,000 Depreciation 80,000 Donations 10,000 Salaries 100,000 Repairs 65,000

Required (i) Taxable income of Mr. Tipis for the year ended 31 December 2020. (ii) Tax liability (if any) from the income computed in above.