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Shisham Limited is a company which trades as a manufacturer of juices. The companys statement of profit or loss for the year ended 31 March

Shisham Limited is a company which trades as a manufacturer of juices. The companys statement of profit or loss for the year ended 31 March 2021 is as follows:

Gross profit

432,000

Other income

Profit on disposal of office building (note 1)

45,000

Bank interest (note 2)

6,800

Expenses

Depreciation

48,740

Professional fees (note 3)

21,870

Repairs and renewals (note 4)

28,990

Other expenses (note 5)

24,300

-123,900

Finance costs

Interest payable (note 6)

-24,740

Profit before taxation

335,160

Notes

  1. Disposal of office building

The profit of 45,000 is in respect of a freehold office building that was sold on 30 June 2020 for 380,000. The chargeable gain on sale has been computed to be 45,500.

  1. Bank interest received

The bank interest was received on 31 March 2021 and is the amount accrued to that date. The bank deposit is held for non-trading purposes.

  1. Professional fees

Professional fees are as follows:

Accountancy and audit fee 5,870

Legal fees in connection with the issue of share capital 8,700

Legal fees in connection with the issue of loan notes (N.6) 6,400

Legal fees in connection with fine for breach of health

And safety legislation 900

21,870

  1. Repairs and Renewals

The figure of 28,990 for repairs includes 9,800 for constructing an extension to the companys manufacturing premises and 5,600 for repainting the interior of the companys offices.

  1. Other expenses

Other expenses include 2,310 for entertaining customers and a qualifying charitable donation of 500.

  1. Interest payable

Shisham limited issued loan notes on 1 October 2020. The capital raised was used for trading purposes. Interest of 24,740 in respect of the first six months of the loan was paid on 31 March 2021.

  1. Maximum capital allowances available for the financial year ended 31 March 2021 are 25,100.

Required:

  1. Assess Shisham Limiteds trading profits for the year ended 31 March 2021. Start with the profit before taxation of 335,160 and list all of the items in the statement of profit and loss indicating by the use of a zero (0) any items that do not require adjustment. Assume that the company claims maximum available capital allowances.
  2. Assess:
  • Shisham Limiteds taxable total profits for the year ended 31 March 2021.
  • Shisham Limiteds corporation tax liability for the year ended 31 March 2021.

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