directors of Total Engineering Company Limited presented the following Profit and Loss Account for the year ended 31 st December 2004 Sh Revenues 30,780,000 Sales 50,000 Interest on Government Securities (Gross) 30,830,000 Expenses Purchases 24,000,000 Wages 2,320,000 Carriage inwards 370,000 Rent 300,000 Insurance 190,000 Trade expenses 100,000 Repairs building 300,000 Machinery 56,000 Advertising 254,000 Legal charges 80,000 Audit fees 70,000 Depreciation 3,017,000 Provision for doubtful debts 104,000 Debenture interest 600,000 Interim dividend 400,000 Proposed dividend 731,300 32,892, 300 Net Loss 2,062,300 The following additional information is provided 1 Purchases returns and sales returns were Sh 500,000 and Sh 700,000 respectively These were left out while preparing trial balance 2 Trade expenses include an amount of Sh 60,000 travel expenses to Korea for the Director as part of the National Chamber of Commerce and industry promotion tour 3 Repairs to machinery include small loose tools written off by Sh 10,000 4 Bad debts which are specifically bad are Sh 74,000 5 Capital allowances have been agreed at Sh 2,000,000 Required a) Taxable profits for the year of income 2004 b) Tax payable if any for 2004 Comment on the results (CPA)

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directors of Total Engineering Company Limited presented the following Profit and Loss Account for the year ended 31 st December 2004. Sh Revenues 30,780,000 Sales

directors of Total Engineering Company Limited presented the following Profit and Loss Account for the year ended 31stDecember 2004.

	Sh
Revenues	30,780,000
Sales	50,000
Interest on Government Securities (Gross)	30,830,000
Expenses:
Purchases	24,000,000
Wages	2,320,000
Carriage inwards	370,000
Rent	300,000
Insurance	190,000
Trade expenses	100,000
Repairs building	300,000
Machinery	56,000
Advertising	254,000
Legal charges	80,000
Audit fees	70,000
Depreciation	3,017,000
Provision for doubtful debts	104,000
Debenture interest	600,000
Interim dividend	400,000
Proposed dividend	731,300
	32,892,300
Net Loss	2,062,300

The following additional information is provided:

1. Purchases returns and sales returns were Sh. 500,000 and Sh. 700,000 respectively.

These were left out while preparing trial balance.

2. Trade expenses include an amount of Sh. 60,000 travel expenses to Korea for the Director as part of the National Chamber of Commerce and industry promotion tour.

3. Repairs to machinery include small loose tools written off by Sh. 10,000.

4. Bad debts which are specifically bad are Sh. 74,000.

5. Capital allowances have been agreed at Sh. 2,000,000.

Required:

a) Taxable profits for the year of income 2004.

b) Tax payable if any for 2004. Comment on the results (CPA).