Mapato Ltd. is a manufacturing company operating in Nairobi industrial area. The following information was obtained from the books of the company for the year ended 31st Dec, 2017;

i. The reported profits for the year before capital allowances amounted to Sh4,296, 000.

ii. The written down values of assets for capital allowance purposes as at 1st Jan, 2017 were as follows;

Computers shs. 390, 000

Plant and Machinery shs. 3,640,000

Tractors shs. 940,000

Furniture and Fittings shs. 120,000

Motor vehicles shss.740,000

iii. The building was constructed on 1st January 2012 and put into used on 1st Jan, 2003. It had a written down value of Kshs. 1,665,000.

iv. The following assets were constructed and acquired during the year;

                              Shs.

Warehouse        784,000

Security wall     160,000

Showroom        348,000

Computer and peripherals 96,000

Motor vehicles 2,000,000

Lorry (above 3 tonnes) 1,290,000

Office cabinets 84,000

Conveyor belts 180,000

Processing machine 680,000

v. During the year, a motor vehicle (saloon) which was purchased in 2007 for shs. 600, 000 was disposed of for shss. 240, 000.

vi. The company demolished a factory extension in July 2017 at a cost of Sh180, 000 in order to conform to industry safety standards.

vii. The company sunk a water borehole at a cost of Shs. 560,000 which was put into use on 1 September 2017

 

Required: 

i. Capital allowances due to the company for the year of income ended 31st Dec, 2017.

ii. Adjusted taxable profit or loss for the year of income ended 31st Dec, 2017.