Shine Limited (Shine), a Hong Kong-incorporated company, carrying on business in Hong Kong as a wholesaler of mobile phones in Hong Kong. For the year ended 31 March 2024, Shine's profit and loss account contained the following details: (3) Staff expenses comprise: $ Salaries, commission, and bonuses 3,700,000 Wages for the director's domestic helper 100,000 Mandatory provident fund (MPF) regular contributions 250,000 Notes $ S Sales Cost of goods sold Gross profit Interest income Compensation received Dividend Income Directors' fees Annual company trip for staff to Bangkok Total per accounts 520,000 4,570,000 16,000,000 (4,280,000) (4) Rent and rates comprise: $ 11,720,000 Rent and rates for the director's quarters in Mid-levels 820,500 ea (1) (2) 72,500 145,000 Rates for office in Central Total per accounts 22,800 843,300 23,000 11,960,500 (5) Selling and marketing expenses comprise: $ (180,000) Distribution and promotion costs 2,300,000 Staff expenses Rebate commissions to distributor, KK Limited in Hong Kong 340,000 (3) (4,570,000) Rebate commissions to undisclosed agents 52,000 Rent and rates (4) (843,300) Selling and marketing expenses (5) (2,694,500) Penalties in speeding by a sales manager on a customer visit Total per accounts 2,500 2,694,500 Interest expenses (6) (105,000) Audit fee (98,200) (6) Interest expenses comprise: $ Repairs and Maintenance (7) (142,600) Depreciation (8) (1,250,000) Interest on a bank loan, secured by a personal guarantee from the company's director 65,000 Bad debts (9) (120,000) Miscellaneous expenses (all deductible) (82,500) Overdraft interest in current account with the bank in Hong Kong Interest on late settlement of accounts payable with a Japanese supplier Total per accounts 25,000 15,000 105,000 Donations (10) (30,000) (10,116,100) Net profit 1,844,400 (7) Repairs and Maintenance comprise: $ Brand new office curtains 32,000 Refurbishment of showroom 85,000 Notes: (1) Interest income comprises: Repair of office cabinet 25,600 Interest on HK$ deposit with a bank in Hong Kong Interest on a loan advanced to a director (Shine has advanced a low-interest rate loan to a director to finance his acquisition of a residential property in the US. The funds were remitted to his bank account in US) Interest from overdue customers in Hong Kong Total per accounts Compensation received comprises: $ 32,000 (8) 28,000 Total per accounts The total depreciation charge for the year was $1,250,000 based on the book value of Shine's fixed assets as at 31 March 2024. During the year, the following additions were made: 142,600 Date Particulars 12,500 72,500 21 July 2023 Purchased some office furniture for $40,000. 1 March 2024 Purchased computer hardware and software for $200,000. (2) $ Customer compensation - a retailer in Hong Kong terminated the distribution contract during the year (9) Bad debts were written off due to the bankruptcy of a customer. 145,000 Total per accounts 145,000 (10) Toby made the following donations during the year: UNICEF Hong Kong (cash) Secondhand furniture to Oxfam Hong Kong $ 20,000 10,000 30,000 (11) Total per accounts The tax written down value brought forward in respect of the plant and machinery pools were: 10%-Nil 20%-$880,000 30% $1,100,000 (12) Shine owned a property which was used as the office in Central. The qualifying expenditure and written down value in respect of the office property for commercial building allowance purposes was $2,700,000 and $700,000 respectively. 3