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X Limited had an accounting profit of Rs. 789,000 for the year ended 31 December 2016. . The accounting profit was after depreciation of Rs.

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X Limited had an accounting profit of Rs. 789,000 for the year ended 31 December 2016. . The accounting profit was after depreciation of Rs. 70,000 and included a profit on disposal (capital gain) of Rs. 97,000. The company had incurred borrowing costs of Rs. 70,000 in the year of which Rs. 10,000 had been capitalised in accordance with IAS 23. The company holds some assets under finance leases. During the year finance charge in respect of the leases was Rs. 15,000 and rentals paid were Rs. 80,000. At 1 January 2016 the tax written down value of machinery was Rs. 120,000 and for buildings was Rs. 600,000. Tax regime All borrowing costs are deductible for tax purposes. Capital gains are not taxable. Fines are not tax deductible. Finance lease rentals are deductible in full for tax purposes. Accounting depreciation is not allowable for tax purposes. Tax depreciation is claimable at 10% per annum for buildings and 15% per annum for machinery applied to tax written down value at the start of the year. Tax is paid at 30%

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