Course: Bangladesh Income Tax

Find Income from Business from the scenario given below: (Please show your work)

1. The trading and profit and loss account of Mr.X & Associates for the year ended 31.12.18 is: Mr.X and Associates Trading & Profit and Loss account For the year ended on December 31, 2018 Taka 80,000 700,000 60,000 15,000 Credit Sales Closing Stock Debit Opening Stock Purchases Wages Depreciation on Machinery Power and Fuel Gross Profit Taka 1,450,000 160,000 10,000 745,000 1,610,000 120,000 18,000 40,000 Salaries Rent, Rates and Taxes Annual Membership Fee 1,610,000 745,000 27,000 25,000 15,000 30,000 Gross Profit Bad Debt Recovered Interest and Discount Received Compensation received Interest on Tax Free Commercial Securities Dividend on X Ltd.'s share Commission Legal Expenses Underwriting Commission Purchase of Trademark 80,000 80,000 80,000 60,000 28,000 30,000 40,000 35,000 18,000 50,000 Bad Debts Accounting Fees Depreciation Office Building Fines and Penalty Donations to Flood Relief Fund Gratuity to Employees Advance Income Tax Loss on sale of office furniture Dowry paid to the daughter Miscellaneous expenses Net Profit 136,000 35,000 12,000 70,000 30,000 280,000 1,045,000 1,045,000 Other information: (1) Salaries include Tk. 20,000 as salaries paid to the owner. (2) Recovered amount of bad debt was previously allowed as bad debt expense. (3) Legal expense is incurred for filing and continuing a case against a competitor for protecting the interest of the business. (4) Fines and Penalties were due to avoidance of tax payment at an earlier period. (5) Annual membership fee is the fee paid to the trade union for the interest of the business. (6) Compensation money is received from insurance company against a claim lodged due to destroy of machinery originally purchased for Tk. 70,000 with a written down value of Tk. 50,000. (7) Tax depreciation was calculated as: Depreciation on Machinery taka 25,000 and Depreciation on office building taka 30,000. Required: Compute the income for business or profession and total taxable income of Mr. X and associates for the year ended on December 31, 2014. 1 October 7, 2020