Norm Ltd runs a small trading business and produces the following income statement for the year to 31 December 2019: £ £. Gross Profit from trading 25,000 Interest receivable 6,500 Profit on sale of business premises (Note1) 2,000 33,500 Advertising 1,100 Depreciation 2,500 Light and heat 425 Miscellaneous expenses (Note 2) 507 Motor car expenses (Note 3) Business rates 1,600 1,900 Repairs and renewals (Note 4) 2,800 Staff wages (Note 5) University of Bradford- Faculty of Management, Law and Social Sciences 12,500 Page VII of 12 UNIVERSITY OF BRADFORD MAKING KNOWLEDGE WORK Telephone 351 (23,683) Profit before tax 9,817 Notes: 1- The profit on the sale of business premises relates to the sale of a small freehold industrial unit in which the company stored paper, before building the extension (see Note 4). 2- Miscellaneous expenses is made up as follows: £ Subscription to printers' association 150 Contribution to national charity under Gift Aid 50 Gifts to customers: Calendars costing £12 each and being the company's name 120 Two food hamper bearing the company's name 100 Other allowable expenses 87 507 3- A director uses the motor car 65% for business purposes and 35% for private purposes. 4- Repairs and renewals comprise the following expenditure: Redecorating administration office 800 Building extension to enlarge paper store 2,000 2,800 5- Staff wages included an amount of £ 250 for a staff Christmas lunch. Required: Calculate Norm Ltd's tax-adjusted trading profit before capital allowances for the year ended 31 December 2019.
Norm Ltd runs a small trading business and produces the following income statement for the year to 31 December 2019: £ £. Gross Profit from trading 25,000 Interest receivable 6,500 Profit on sale of business premises (Note1) 2,000 33,500 Advertising 1,100 Depreciation 2,500 Light and heat 425 Miscellaneous expenses (Note 2) 507 Motor car expenses (Note 3) Business rates 1,600 1,900 Repairs and renewals (Note 4) 2,800 Staff wages (Note 5) University of Bradford- Faculty of Management, Law and Social Sciences 12,500 Page VII of 12 UNIVERSITY OF BRADFORD MAKING KNOWLEDGE WORK Telephone 351 (23,683) Profit before tax 9,817 Notes: 1- The profit on the sale of business premises relates to the sale of a small freehold industrial unit in which the company stored paper, before building the extension (see Note 4). 2- Miscellaneous expenses is made up as follows: £ Subscription to printers' association 150 Contribution to national charity under Gift Aid 50 Gifts to customers: Calendars costing £12 each and being the company's name 120 Two food hamper bearing the company's name 100 Other allowable expenses 87 507 3- A director uses the motor car 65% for business purposes and 35% for private purposes. 4- Repairs and renewals comprise the following expenditure: Redecorating administration office 800 Building extension to enlarge paper store 2,000 2,800 5- Staff wages included an amount of £ 250 for a staff Christmas lunch. Required: Calculate Norm Ltd's tax-adjusted trading profit before capital allowances for the year ended 31 December 2019.
Chapter6: Deductions And Losses: In General
Section: Chapter Questions
Problem 44P
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Transcribed Image Text:Norm Ltd runs a small trading business and produces the following income statement for
the year to 31 December 2019:
£
Gross Profit from trading
25,000
Interest receivable
6,500
Profit on sale of business premises (Note1)
2.000
33,500
Advertising
1,100
Depreciation
2,500
Light and heat
425
Miscellaneous expenses (Note 2)
507
Motor car expenses (Note 3)
Business rates
1,600
1,900
Repairs and renewals (Note 4)
2,800
Staff wages (Note 5)
University of Bradford- Faculty of Management, Law and Social Sciences
12,500
Page VII of 12
UNIVERSITY OF
BRADFORD
MAKING KNOWLEDGE WORK
Telephone
351
(23,683)
Profit before tax
9,817
Notes:
1- The profit on the sale of business premises relates to the sale of a small freehold
industrial unit in which the company stored paper, before building the extension (see Note
4).
2- Miscellaneous expenses is made up as follows:
Subscription to printers' association
150
Contribution to national charity under Gift Aid
50
Gifts to customers:
Calendars costing £12 each and being the company's name
120
Two food hamper bearing the company's name
100
Other allowable expenses
87
507
3- A director uses the motor car 65% for business purposes and 35% for private purposes.
4- Repairs and renewals comprise the following expenditure:
£
Redecorating administration office
800
Building extension to enlarge paper store
2.000
2,800
5- Staff wages included an amount of £ 250 for a staff Christmas lunch.
Required:
Calculate Norm Ltd's tax-adjusted trading profit before capital allowances for the year
ended 31 December 2019.
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