Alice Fabian is an entrepreneur from Belgium. She trades gourmet chocolate in the European Union. Alice arrived in Singapore on 27 January 2020 to assess market demand for her chocolates in the country. She started business as a sole proprietorship on 1 February 2020 but ended operations on 31 May 2020 due to COVID-19.

Alice was not trained in accounting. However, she was aware of the record-keeping requirements in Singapore. Hence, Alice recorded all business transactions. The statement of profit or loss for the financial period from 1 February 2020 to 31 May 2020 of Alices sole proprietorship is presented below.

(1) Other income included the following non-trade related income:

• Dividends issued by a Singapore tax resident company of $129;
• Gains derived from sale of equipment of $2,484; and
• Interests earned from staff loans of $987.

Alice signed a sale and purchase agreement for the sale of equipment on 19 February 2020 in Singapore. She sold the equipment as they were unfit for business. Alice knew that this transaction resulted in a balancing charge of $2,484.

(2) Expenses were revenue in nature, unless otherwise stated.

(3) Selling and distribution expenses included the following expenses:

• Delivery fees of $2,897 incurred for order fulfilment purposes;
• Private car reimbursements of $8,973 incurred for official business meetings;
• Provision for reinstatement costs of $27,000 envisaged to be incurred;
• Retail shop rental of $7,000 per month incurred for day-to-day operations; and
• Salaries of $36,000 incurred for the employment of various employees.

Alice signed a tenancy agreement for the rental of retail shop for four months with effect from 1 February 2020 on 29 January 2020 in Singapore. She offered to pay above the market rate of $6,500 per month to secure the tenancy of the retail shop.

Alice used about 80% of the retail shops floor space for her business. She used the remaining 20% of the retail shops floor space for her personal use. Alice used this space to store her private collection of books shipped from Brussels to Singapore.

Alice paid salaries to a chocolatier and a shopkeeper. She confirmed that their salaries amounted to 70% of the total salaries recorded. Alice paid herself salaries, as the retail shops manager, with the remaining 30% of the total salaries recorded.

(4) Administrative and other expenses included the following expenses:

• Costs of $22,345 incurred for the purchase of new equipment;
• Depreciation of $745 recorded for the wear and tear of equipment;
• Donations of $2,000 made to institutions of a public character;
• Entertainment expenses of $874 charged to business account; and
• Legal fees of $2,480 incurred for the application of business licence.

Alice purchased equipment, which qualify for capital allowances, to make gourmet chocolates for sale in her retail shop. Alice was informed to claim balancing allowances of $12,247 by the IRAS.

Alice met up with her friends at various restaurants in Singapore when they visited from Belgium. She included expenses incurred therefrom, which amounted to $136, in her sole proprietorships statement of profit or loss as entertainment expenses.

Alice signed an engagement letter with Tito Isaac & Co for legal services on 28 January 2020 in Singapore. She required help with the application of business licence. Alice did not pay for the other advisory services rendered out of goodwill.

Compute Alices Singapore income tax payable for YA 2021. Show all workings in your answer. Account for all income and deductions in your income tax computation. For example, if no tax adjustment is required for an income or expense, tax adjustment relating to that income or expense must be included in your income tax computation as $0.

Note ($) ($) 934,284 (238,478) 695,806 23,493 1 Revenue Less: Cost of goods sold Gross profit Add: Other income Less: Expenses Selling and distribution expenses Administrative and other expenses Finance costs 2 3 4 (387,287) (237,832) (32,473) (657,592) 61,707 Net profit before tax Note ($) ($) 934,284 (238,478) 695,806 23,493 1 Revenue Less: Cost of goods sold Gross profit Add: Other income Less: Expenses Selling and distribution expenses Administrative and other expenses Finance costs 2 3 4 (387,287) (237,832) (32,473) (657,592) 61,707 Net profit before tax