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3/73 OFESSIONI ILLUSTRATION 20 Rig From the following Profit and Loss Alc for the year ending 31.3.2015. Compute Business Income of Mr Shobit To Opening stock To Purchases To Gross profit Cld 25,00,000 By Sales (Including sales tax) 94,00.000 By Closing stock 56,00.000 2 155.00.000 20,00.000 1.75,00,000 1.75,00.000 56,00.000 10.500 20.000 To Salaries and wages To Rent To Advertisement To Travelling Expenses To Bad debts To General Expenses To Franchises purchases To Addition to office building To Sales tax paid To Income tax paid To Net profit 5.00,000 By Gross profit b/d 1,20,000 By Interest from debtors 3,00,000 By Bad debt recovered 2,00.000 (not allowed as deduction) $2,000 By Refund of Income Tax 3.00,000 By Interest on Income tax Refund 3.00.000 3,00,000 2.50.000 1.50.000 31,70,000 10.000 1,500 56.42.000 56.42.000 Additional Informations ( Both opening and closing stock are under valued by 20% of cost Stock taking at the end revealed a thelt of goods amounting to 20,000 (ii) Franchises were purchases on 1-08-2014 and were put to use on l-11-2014 (ui) Advertisement Expenditure includes cost of neon sign boards installed at various places in the cities amounting to 100.000 (iv) On 1-4-2014, the W D V of office building is 50,00,000. The Expendiwre on addition to office building includes 250,000 in respect of furnishing of the meeting hall (v) Sales tax of 20,000 for py 2013-14 was paid on 15-1-2015 but not included in the above profit and loss Alc (VD) Bad debt recovered 20,000 during the previous year in respect of past bad debt of a discontinued business and have not been included in above P&L Alc. The amount was claimed as deduction as bad debt in the past. (vii) General Expenses include