Riziki Insurance Company Ltd$.$ was incorporated in year $2019.$ The company deals with different classes of insurance. The following trial balance was extracted from the books of accounts as at $31$st December $2021$:

Sh$.$ Sh$.$

Property, plant and equipment $10,200,000$

Provision for depreciation $805,000$

Investment in government securities $1,200,000$

Gross premiums received from direct clients:

Motor vehicle $3,000,000$

Fire $2,500,000$

Commission on reinsurance accepted:

Motor vehicle $600,000$

Fire $200,000$

Commission on reinsurance ceded

Motor vehicle $700,000$

Fire $300,000$

Sundry receivables $750,000$

Bank balance $90,000$

Directors fees $495,000$

Reinsurance premiums paid:

Motor vehicle $400,000$

Fee $150,000$

Unearned premiums as at $1$st January $2021$:

Motor Vehicle $4,800,000$

Fire: $2,500,000$

Claims outstanding as at $1$st January $2021$

Motor Vehicle $1,100,000$

Fire $840,000$

Claim paid:

Motor Vehicle $2,770,000$

Fire $2,110,000$

Legal costs on claims

Motor vehicle $280,000$

Fire $130,000$

Sundry expenses on motor vehicle claims $220,000$

Provision for bad and doubtful debts

Motor vehicle $370,000$

Fire $320,000$

Management expenses:

Motor vehicle $450,000$

Fire $380,000$

Investment income $4,150,500$

Premiums returned: Motor vehicle $800,000$

Fire $700,000$

Profit and loss account $329,500$

$23,420,00023,420,000$

Additional Information

$1.$ Claims intimated and outstanding at $31$st December $2021$ amounted to sh$.750,000$ for motor vehicle insurance and sh$.480,000$ for fire insurance.

$2.$ Unearned premium is maintained at $80\%$ and $50\%$ of net premiums received for motor vehicle and fire insurance respectively.

$3.$ Investment allowances have been agreed with the commissioner at sh$.1,200,000$ for the year ended $31$ December $2021.$

$4.$ Investment income analysis: Sh$.$

Interest received from Government securities $2,040,000$ net

Interest received from local banks $760,500$ net

Dividend received from a Ugandan company $450,000$ gross

Dividend received from a local company $900,000$ net

$5.$ Fees paid to investment managers amounted to sh$.750,000$ for the year ended $31$st December $2021.$

Required:

Taxable income or loss for Riziki Insurance company and the tax payable for the year ended $31$st December $2021.(20$ marks$)$