On 1 January 2013, Morris has started a sole trader business of on 31 December. His Profit and Loss Account for the year follows:

Sales Less: Cost of Sales Gross Profit Add: other Income

Interest received on Debenture 6,000

Interest from Individual Savings Account 1,000 Dividend income 9,000

Less: Expenses: Depreciation 20,000 Wages and Salaries 15000 Interest Expense 6,000 Subscription 2,000 Donation 5,000 Bad and doubtful debt 3,000 Gift and Entertainment 4,500 Other Expense 2,500 Repairs and maintenance 8,500 Car Lease Rent 8,000 Car Expenses 6,800 Legal fees at the acquisition of land 500 NET PROFIT

printing-press preparing accounts ended 31 December 2019 is as

500,000 (200,000) 300,000

16,000 316,000

(81,800) 234,200

Notes:

1. The daughter of Morris is also working for the business. Morris gave a salary of 6,000 to her. For the same work, another staff receives a salary of 4,000

2. Few of his customers became bankrupt and Morris treated 1,600 as Bad and doubtful debt. Also, Bad and doubtful debts include 200 for Customer loan written off, 800 for suppliers loan written off, and 400 for former employee loan written off.

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3. The donation includes 200 for Local Charity, 4,000 for National Charity, 800 is for the Political party.

4. Subscription paid 900 for sports club membership of Morris and 300 for printers association and the remaining is for business purposes.

5. Interest expense includes 700, the interest on loan borrowed for the construction of the main Residence of Morris.

6. Repairs and maintenance include 5,000 for adding a room to store the papers, 1,500 for the purchase of a packing machine, 200 for painting the building. The remaining 1,800 is revenue expenditure for business purposes.

7. Other expenses include 200 staff parking fine during business hours, 100 parking fine of Morris during his official visit, 150 speeding fine for Morris, 500 for a penalty for not following the safety regulations and 50 is a wedding gift to staff, remaining 1,500 is for business purposes.

8. Gift and Entertainment: Morris arranged a staff party and spent 500 on that. Also, he arranged a party for customers for 800. He made so much gift to staff and customers which are listed below:

Gift of pen-drive (flash drive) costing 15 each for 10 staff and gift of chocolate box costing 10 each for 10 staff. Gift of calendar costing 5 each for 500 customers and gift of a box of Red Bull costing 8 per box to 50 customers.

A gift to his daughter on her birthday 50

9. Car Expenses:

Morris had 3 cars: Car 1 is used by Morris only for personal use. The expense of this car is 2,000. Car 2 is used by Morris 30% for personal purposes. The expense of this car is 3,000. Car 3 is used by staff, 100% for personal purposes. The expense of this car is 1,800

10. Morris has taken a car on a rental basis for business for the annual rent of 8,000. The

CO2 emission of the car was 140 g/km. 11. The capital allowance of the business for the year-end 31 December 2019 is calculated

as 30,000.

12. The trading loss for the year ended 31 December 2018 was 50,000

Required to: a) Calculate the adjusted trading Profit of the business of Morris for the year ended 31

December 2019. (5 marks)

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2. b) Explain how to adjust the business loss of Morris for the year ended 31 December 2018 and show the adjustment in the computation. (1 mark)

3. c) For the tax year 2019/20, Morris filed his Income-tax return on 30 September 2021. Calculate the penalty payable by him.

On1 January 2013. Morris has started soleader bosiness of prin press preparing accounts on 31 December. His Profit and Low Account for the year ended 31 December 2019 is as 300.000 200,000 300.000 6.000 1.000 9.000 16.000 316.000 20.000 Sales Le Cost of Sales Gross Profit Add other face Interest received on Debestone Interest from Individual Sim Account Dividende Lex Expetes Deprecio Wages and Sale Interest Expense Subscription Di Had to delete Gli and Entertainment Other | Brain nearan Car LR Car Expo | Legal for at the age lation of land. NET PROFIT 2.000 5.000 4.500 2.300 8.500 6.100 500 031.00) 23.4.200 1. The daughter of Moabio working for the business Marriage salary of 4,000 tohet. For the same wote water stafectively of 4,000 2. Fow of his comes became bankrupe and Mortis teated 1.600 Bod and doubertul debt. Also, Bad und dubieu debes include 200 for Customer loan wise off, 1800 sce supplier's loan write off, and E400 Soomet esployee Lisan written of 1. The dais tation com , 14.00 artarian the talaal pam 1 startpam part coar poanadhi sarathanaigarthamalae arra its earlie: - her than a tantines aL - 20 to me a san 1. thaan I (1 a kal latta | arasa 15 - 12 Nataliay tv ty tamil ayal is The aapaarai 2001 Cls, Maan ar puranaal paa . has the team De areas a pls malai tea - at 1: Leaker 2009 Austine 12 The rating last her the year asted H Ikeather 200 mLAND 71 1 - IIIPAL, Martin tist his terature 11 On1 January 2013. Morris has started soleader bosiness of prin press preparing accounts on 31 December. His Profit and Low Account for the year ended 31 December 2019 is as 300.000 200,000 300.000 6.000 1.000 9.000 16.000 316.000 20.000 Sales Le Cost of Sales Gross Profit Add other face Interest received on Debestone Interest from Individual Sim Account Dividende Lex Expetes Deprecio Wages and Sale Interest Expense Subscription Di Had to delete Gli and Entertainment Other | Brain nearan Car LR Car Expo | Legal for at the age lation of land. NET PROFIT 2.000 5.000 4.500 2.300 8.500 6.100 500 031.00) 23.4.200 1. The daughter of Moabio working for the business Marriage salary of 4,000 tohet. For the same wote water stafectively of 4,000 2. Fow of his comes became bankrupe and Mortis teated 1.600 Bod and doubertul debt. Also, Bad und dubieu debes include 200 for Customer loan wise off, 1800 sce supplier's loan write off, and E400 Soomet esployee Lisan written of 1. The dais tation com , 14.00 artarian the talaal pam 1 startpam part coar poanadhi sarathanaigarthamalae arra its earlie: - her than a tantines aL - 20 to me a san 1. thaan I (1 a kal latta | arasa 15 - 12 Nataliay tv ty tamil ayal is The aapaarai 2001 Cls, Maan ar puranaal paa . has the team De areas a pls malai tea - at 1: Leaker 2009 Austine 12 The rating last her the year asted H Ikeather 200 mLAND 71 1 - IIIPAL, Martin tist his terature 11