Mohammed Ali and Ahmed Al Farsi established their own Auditing office for auditing accounts and financial services on 1^st January 2016. Both of them share the profit and loss. Their business is called MA Auditing Services Co. Their professional license no. is 3291, issued by the Ministry of Commerce and Industry, Muscat, on 1^st January, 2016 and its expiry date is on 1^st January 2019. This license is temporary. It is for three years only but it is renewable.

They registered their business at the Ministry of Commerce in Muscat on 7^th March 2016. The capital written in the commercial registration was OMR 50,000. On 19 March 2016, they registered electronically at the Secretariat General for Taxation. However, they started their operation on 1^st April 2016. Therefore, the first accounting period ended on 31^st December 2016.

The estimated taxable income earned during the first accounting period was OMR 275,000. He submitted the provisional return on 23 February 2017 while the final return was submitted on 1^st April 2017. The auditing office is located in Ruwi, Muscat and its address is as follows:

-Post Box no.54, P.C. no. 112, Commercial registration no. : 1/224698, Muscat, Telephone no.:

24494329 Fax no. : 24494338. Mohammed Ali is the Deputy Executive Manager. He is the

Principal Officer. He lives in Muscat and his ID no. is 11753978 and mobile number is 99654325.

The trial balance of accounts for the year ended on 31st December, 2016 is provided below:

Account Name	Debit	Credit
Cash	177,936
Accounts Receivable	99,116
Inventory	1,000
Property, plant and equipment (net)		40,000
Capital		50,000
Gain from disposing a car		2,000
Loss from disposing securities listed in MSM	8000
Sales		450,000
Rental Revenue		15,000
Cost of services provided	13,500
Wages and Salaries (Employees)	25,200
Administrative expense	18,450
Salaries Expenses (Partner)	60,000
Depreciation Expenses	22,400
Sponsorship Expense	21,000
Donations	15,000
Rent Expenses	36,000
Contributions to Public Authority for Social Insurance	2,898
Audit fees	5,000
Vehicle Cost	17,500
Bad debts expense	31,000
Tax consultancy	3,000
Total	557,000	557,000

Additional Information:

1. Rent expense was paid to the landlord and both signed the rent contract and agreed to the contract terms.
2. OMR 15,000 was paid to a charitable team which is approved by the financial affairs and energy resources council.
3. Mohammed Ali and Ahmed Al Farsi are general partners. Mohammed Ali is an independent Executive Manager while Ahmed is working on full time-basis. His salary in the contract is OMR 6,000.
4. Bad debts of OMR 31,000 were uncollectible. However, one debtor has been bankrupted and he was due for OMR 6,500. They received a bankruptcy certificate form the court pertinent to this debtor.
5. Company paid rent OMR 30000 for two villas: one villa costing OMR 20,000 for running their services and another one costing OMR 10,000 used as an accommodation their employees.
6. The beginning balance of carrying value of plant and machines was OMR 54,000. Straight-line Method was used with depreciation rate of 25%.
7. Company paid sponsorship fees of OMR 21,000 including OMR 1000 for commission.

Calculation of Net Income and General Rules for deduction??????