New-home Ltd is a resident manufacturing business in Mombasa. The following is the statement of

incomes for the year of income ending 31 December 2019.

Kshs "000"

Sales ........................................................... 44,650,000

Opening stock................................................3,478,000

Purchases.................................................... 15,600,000

Closing stock ............................................... 5,467,900

13,610,100

31,039,900

Profit on sale of shares ex-dividend.................1,240,000

Bad debts recovered (specific) ...................... 126,980

32,406,880

Operating expenses

Depreciation ..................................................4,567,800

Directors' remuneration .....................................675,000

Salaries and wages ...........................................897,540

General expenses..............................................568,000

Auditor's fees....................................................456,000

Reserves .......................................................2,135,000

Bad debts reserve .............................................890,000

Taxes ...............................................................132,890

Interest on loan ................................................975,870

Manufacturing expenses .................................8,965,000

Supplies used ................................................1,215,600

Commissions paid .............................................375,000

Provisions for dividends ..................................1,230,000

Fire insurance ............................................. 178,090

23,261,790

Net profit 9,145,090

Additional information

a) The capital allowances were agreed at Kshs 5,100,000

b) Bad debts (specific) are Kshs 670,000,000

c) Taxes represent VAT paid

d) General expenses include donations of Kshs 200,000,000

Required:

a) The adjusted income/loss for the year of income

b) What was the tax position of the company for the year?