Assume the current corporation tax rate is 30%. The directors of ABC Ltd were surprised when they received a corporation tax assessment for less than 30% of its reported profits. Which of the following items may have contributed to ABC Ltd receiving a tax assessment which was lower than anticipated?

I losses carried forward from previous years

II capital allowances which are higher than depreciation

III entertaining expenses which are disallowed for tax

A I only

B II only

C I and II only

D I and II and III