AAC Services Ltd, a Hong Kong incorporated company, provides accounting services in Hong Kong and China. It has engaged a team of accountants who are required to travel between Hong Kong and China. For the year ended 31 May 2019, AAC has the following operation results:

Income

Service fees (1) 1,200,000

Investment income

dividend from securities (2) 21,000

profit from sale of securities (2) 400,000

bank interest income (3) 1,000

currency trading gain (4) 50,000

Total income 1,672,000

(1) Included in the service fees of $1,200,000 is a billing of $400,000 derived from services fully rendered by the accountants in China.

(2) AAC was involved in holding and trading in listed securities in Hong Kong. Apart from the dividend, AAC made a gain of $550,000 and a loss of $150,000 from trading in these securities. The net gain is $400,000.

(3) Bank interest income comprises the following:

Interest on RMB deposit with a bank in Hong Kong 400

Interest on RMB deposit with a bank in China 600

(4) During the year, AAC made a net profit of $50,000 from the buying and selling of foreign currencies. Part of the fund used for foreign currency trading was sourced from AACs bank loan.

What is the amount of taxable income of AAC Service Ltd in the respect of the year ended 31 May 2019? Briefly explain