Milungu Plc is a manufacturing company listed on the Lusaka stock Exchange (LUSE). The company; which has been trading for many years, prepares accounts to 31st December each year.

During the year ended 31st December 2023, the company had the following

results: K'000  K'000

Gross Trading Profit - 1,990,780

Dividends Received (Net) from Lukupa (Z) Ltd - 221,34 0

Discount Received - 3,650

Bank Interest Received from Luombe(Z) Bank ltd (Gross) - 136,800

Debenture Interest Received from Kateshi Plc (Net) - 40,630

Profit on Disposal of Motor Van (Note 1) - 5,830

Less: Expenses

Salaries & Wages (Note 2) - 506,490

Canteen Expenses - 214,270

Depreciation - 149,050

Legal Expenses (Note 3) - 22,860

Bad Debts (Note 4) - 8,630

Repairs and maintenance (Notes 5) - 94,780

Advertising (Note 6) - 58, 720

Entertainment and Gifts (Note 7) - 50,640

Loss on Disposal of Equipment (Note 8) - 2,750

General expenses (Note 9) - 357,260

Provision for taxation (Note 10) - 180,000

Dividends Paid (Note 11) - 42,000

Transfer to General Reserve - 100,000

Net Profit - (1,787,450)

 - 611,580

Notes:

1.Profits on Sales of Motor Van

The company sold a motor Van for K12,800 000 on 18th February 2023. The Van sold was a Toyota Hilux that had been acquired for Kl 9,245,000 in July 2018.

2.Salaries and Wages - K'000

Directors emoluments - 150,610

Salaries & Wages for their employees - 212,080

Theft of money by the Director of Finance who has since been suspended - 40,000

NAPSA Contributions for employees -

32,420

PAYE deductions for employees paid to ZRA - 65,650

Penalty for late remittance of NAPSA Contributions - 5,730

 -506,490

3.Legal Expenses

•Drafting employees' service contracts - 2,680

•Recovery of loan from former employees - 3,400

•Breach of Environmental Council of Zambia regulations in disposing

of industrial waste - 5,890

•Defending action in alleged faulty Goods - 4,120

•Legal Fees in connection with issue of shares to increase the company's share capital - 3,950

•Legal fees in connection with the issue of Debentures - 2,820

 - 22,860

4. BAD DEBTS ACCOUNT

Bad Debts Account - K'OOO K'OOO

Trade debts written off - 5,710 balance b/f:

Loans to employee written off - 9,000 General provision 4,860 off

Specific provision - 5,990

Balance C/F:

Bad debts recovered - 3,690

General Provision

3,940 Loan to employee recovered - 2,000

Special provision

6,520 Profit and Loss Account - 8,630

•25,170  •25,170

5.Repairs & Maintenance: K'OOO

Replacement of broken office window panes - 5,040

Office Partitioning and painting - 3,970

Redecorating offices - 4,340

Replacement of Floor Tiles - 31,290

Rebuilding part of wall fence which collapsed due to heavy rainfall - 12,080

InitiaI repairs of a recently acquired second hand Mitsubishi Truck - 23,450

Decorating Company premises - 5,760

Clearing the recently acquired land for the construction of new factory - 8,940

 -94,870

6.Advertising: - K'OOO

Adverts on National Television - 15,700

Bill Boards - 10,020

Adverts in a local Newspaper - 8,950

Gifts of 200,000 calendars to customers carrying Company Name - 4,930

Mounting Neon Signs - 19,120

 - 58,720.

7.Entertainment & Gifts: - K'OOO

Entertaining special foreign suppliers - 18,360

Staff Christmas party - 11,110

Entertaining prominent customers - 13,930

Gifts of Foodstuffs & drinks to potential customers - 7,240

 - 50,640

8.Loss on Disposal of Equipment:

The company sold some of its computers on auction sale for Kl3,800,000 on 31st October 2023. The original cost of the computers sold was K26,500,000 acquired in May 2016.

The loss on disposal was charged to the profit and loss Account.

9.General Expenses: - K'OOO

General cleaning expenses - 96,740

Cost of training employees - 120,830

Penalty for late remittance of - 590 Company Income Tax Return - 1,250

Parking fines on company vehicles - 680

Penalty for late VAT Return - 137,170

Sundry allowable expenses - 357,260.

10.Provision for taxation:

This is based on the Total Company Income Tax paid in respect of the year ended 31st December 2022. The amount of company tax already paid under the provisional system of paying tax for the year ended 31st December 2023 is K198,200,000.

11. On 1st October 2023, Milungu plc paid a dividend of K282 Million. The K282,000,000 is the gross amount before deducting tax.

Additional information:

The company is Registered for VAT purposes, and the Sales, purchase and other expenses figures shown in the profit and loss account have been correctly dealt with for the Value Added Tax (VAT) purposes.

The company has employed two (2) handicapped employees, a Receptionist and an Accounts Clerk.

REQUIRED:

Calculate the company' s taxable profits for the charge year 2023 and its tax payable on the profits and dividends for the year under review.