A company's income statement for the year to 31 March 2018 is as follows:

Notes:
1) The company acquired £240,000 of 10% debentures (for non -trade purposes) on 1 January 2018. Interest is receivable half -yearly on 30 June and 31 December. No interest was received during the year to 31 March 2018.
2) Bank interest receivable includes interest of £ 450 which had accrued at 31 March 2018 but which was not received until April 2018. There was no accrued interest at 31 March 2017.
3) The property was let on 1 December 2017 at a rent of £1,000 per month payable quarterly in advance on 1 December, 1 March, 1 June a nd 1 September. There were no allowable expenses in the year to 31 March 2018.
4) The agreed chargeable gain on the sale of the investments was £8,450.
5) £500,000 of 10% debentures were issued (for trade purposes) on 1 April 2017. The interest is payable (net of income tax) on 1 January each year.
6) As from 1 July 2017 , the company is required to pay patent royalties of £10,000 per annum, deducting basic rate income tax at source. The net amount p aid in the year to 31 March 2018 was £4,000. The royalties are payable for trade purposes.
7) Capital allowances of £32,700 are claimed for the year.
8) All figures given in the income statement are gross.
Compute the taxable total profits for the year.

Transcribed Image Text:

Gross trading profit Receivable from other UK companies: Dividends Debenture interest (Note 1) Bank interest receivable (Note 2) Income from property (Note 3) Profit on sale of investments (Note 4) Less: Distribution costs (all allowable) Administrative expenses (all allowable) Directors' fees Interest on bank overdraft Debenture interest payable (Notes 5, 8) Patent royalties payable (Notes 6, 8) Depreciation of tangible fixed assets Net loss for the year 97,500 101,150 383,870 4,000 6,000 2,600 4,000 22,490 422,960 50,000 23,780 50,000 7,500 108,300 438,230 (15,270)