Solution-Calculate the taxable income for quality

Calculate the taxable income for quality mechanical services

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Reference no: EM131562646

Question - The Profit and loss account of (Sole Trader) Quality Mechanical Services for the year ended 31/12/16 shows the following:

Sales		80 000
Less COGS		15 000
Gross profit		65 000
Less Expenses
Donations	1 500
Advertisements	390
Depreciation	5 000
Legal fees	500
Rent	100
Interest on overdraft	4 300
Insurance	5 600
Wages	4 330
Bank fee	700	22 420
Operating profit		42 580
ADD OTHER INCOME
Gain from sale of asset		4 100
Net profit		$46 680

Additional information:

Depreciation for tax purpose - $ 8000

Gain on sale for tax purpose - $ 1800

Loss carried forward (5 years) - $ 4 000

Tax paid in advance - $ 10 700

Donation was to approved charity

Legal fees was incurred to buy a building from ANZ bank

Required: Calculate the taxable income for Quality Mechanical Services as at 31/12/2016.

Reference no: EM131562646

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Calculate the taxable income for quality mechanical services

Reference no: EM131562646

Reference no: EM131562646

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