Balancing allowance

Required:

Compute the tax liability of the company.

Serobe (Pty) Ltd, a manufacturing company in Botswana has the following income for the tax year ended 31 March 2023: Income Gross Profit Dividends received from local companies Profit from sale of noncurrent assets Decrease in provision for bad debts Interest from the bank Expenditure Administration costs Bad debts Depreciation Salaries and wages Approved training expenditure Net Profit Additional information (Note 1) 1. 2. 3. 4. Bad debts are made up as follows: Provision for general bad debts Provision for specific bad debts Total capital allowances Assessed loss from previous year Balancing allowance 40,500 80,000 20,000 56 ooo 350,000 550,000 400 ooo 4 050 ooo 1 146 ooo P220,OOO P230 OOO P350 OOO P250,OOO P320,OOO P40,OOO Required: Compute the tax liability of the company. Page 7 of 8 [20 Marks]