Tax Accounting "332"

Al-Wafa Commercial Company, a public shareholding company, presented the profit and loss account in NIS for the year ended

31/12/2018 which were as follows:

Al-Wafaa Commercial Company

List of profits and losses for the year 2018

3,000,000 total income

Less: expenses

170,000 rental expenses

360,000 salaries

290,000 incorporation expenses

90,000 depreciation

65,000 R&D expenses

34,800 hospitality expenses

85,000 end of service gratuity

35,200 training expenses

510,000 bad debts

480,000 provision for doubtful debts

2,120,000 total expenses

880,000 net income

When making the estimate, the estimator shows the following:

1. The amount of NIS 60,000,000 in which deductions are not met.

2. The founding expenses amounted to NIS 1,300,000.

3. Among the consumption is a machine whose cost is 180,000 NIS, which is 20% consumed, while the taxable rate on this machine is 15%.

4. The end of service gratuity was paid to a company employee who worked for the company for a period of 14 years, and the last salary was NIS 200,5.

5. Among the bad debts, the amount of NIS 50,000,000 does not meet the conditions for accepting the debt execution.

6. Staff training items, research and development expenditures, hospitality expenses, end of service gratuity and doubtful debts allowance were dealt with according to the law.

Required: Calculation of the income tax owed by the company for the year 2018 (please show the complete solution