The document presents two profit and loss accounts for Mr. X and Raj Oil Mills for the year ending March 31, 2019, detailing their respective incomes and expenses. It includes additional information necessary for calculating taxable income, such as depreciation, personal use of assets, and specific expenses. The goal is to compute the taxable income from business for both entities based on the provided financial data.
The document presents two profit and loss accounts for Mr. X and Raj Oil Mills for the year ending March 31, 2019, detailing their respective incomes and expenses. It includes additional information necessary for calculating taxable income, such as depreciation, personal use of assets, and specific expenses. The goal is to compute the taxable income from business for both entities based on the provided financial data.
The document presents two profit and loss accounts for Mr. X and Raj Oil Mills for the year ending March 31, 2019, detailing their respective incomes and expenses. It includes additional information necessary for calculating taxable income, such as depreciation, personal use of assets, and specific expenses. The goal is to compute the taxable income from business for both entities based on the provided financial data.
The document presents two profit and loss accounts for Mr. X and Raj Oil Mills for the year ending March 31, 2019, detailing their respective incomes and expenses. It includes additional information necessary for calculating taxable income, such as depreciation, personal use of assets, and specific expenses. The goal is to compute the taxable income from business for both entities based on the provided financial data.
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Problem no 1:-
The following is the Profit and Loss Account of Mr. X for the year ended on 31st March, 2019. Compute his taxable income from business for that year:
Profit and Loss Account
(For the year ended 31st March, 2019}
PARTICULARS RS PARTICULARS RS
Opening Stock 15,000 Sales 2,80,000
Purchase 1,40,000 Closing Stock 20,000
wages 20,000 Gift from Father 10,000
Rent 46,000 Sale of Car 17,000
Repairs of Car 3,000 Income tax Refund 3,000
Medical Expenses 3,000
General Expenses 10,000
Depreciation of Car 4,000
Profit for the year 89,000
TOTAL 3,30,000 TOTAL 3,30,000
Following further information is given:
(1) Mr. X carries on his business from rented premises half of which is used as his residence. (2) Mr. X bought a car during the year for Rs 20,000. He charged 20% depreciation on the value of the car. The car was sold during the year for Rs 17,000. The use of the car was 3/4th for the business and 1/4th for personal use. (3) Medical expenses were incurred during the sickness of Mr. X for his treatment. (4) Wages include Rs 250 per month on account of Mr. X’s driver for 10 months. Problem 2 : The following is the Profit and Loss Account of the Raj Oil Mills for the financial year 2018-19. Compute its business income on the basis of additional information. Profit and Loss Account (For the year ended 31st March, 2019)
PARTICULARS RS PARTICULARS RS
Office Salaries 15,000 Gross Profits 80,000
Bad Debts 1,000 Recovery of bad debts 5,000
Advertising Expenses 3,700 Interest on Govt. 3,500
Securities Insurance Premium 1,500 Dividends 3,500 (fire) Depreciation 5,000 Gifts on the occasion of 5,000 Gruhapravesam Reserve for bad debts 3,000
Donation to a school 2,500
Car Expenses 2,000
Net Profit 71,300
TOTAL 1,12,000 TOTAL 1,12,000
Additional information: (a) General expenses include: {i}Rs 2,500 as compensation paid to an accountant who had to be removed from service in the interest of business, and
{ii}Rs 3,300 as contribution paid to the Govt. for laying electric cables for the company’s plant.
(b) Depreciation as regards to the relevant blocks of assets under the Income Tax Act was Rs 3,500. (c) In the assessment year 2015-16 the Assessing Officer had refused to allow deduction for the bad debts of Rs 5,000 now recovered. (d) Car expenses include Rs 500 attributable to use of car for personal work.
Oromia State University College of Law and Governance School of Law LL.M Program in Commercial and Investment Law Final Examination On International Economic Law (A/Y.2021 2 Semester) Instructions
