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Page 1/11 SECTION A- ANSWER ALL QUESTIONS N- Question 1 Mark O'Neill has been self-employed for many years, running his sports clothing shop. He has the following results prepared on the accruals basis for the year ended 31 March 2021 Note Sales 755,400 Cost of sales (255,000) Gross profit 500,400 Wages and salaries 1 251,400 Bad debts 6,000 Sales commission 9,088 Loss on sale of non-current assets 3,600 Rent and rates 7,859 Insurance and telephone 3,554 Repairs and renewals 7,200 Depreciation 30,800 Heating and lighting 4,455 Professional charges 3 5,200 Bank interest 1,370 Subscriptions and donations 1.920 Miscellaneous expenses 5 11,602 I (344,048) Other income: Discounts received 1,560 Dividends received 2,940 Rents received net of expenses 6,540 11,040 Net profit 167,392 8,425 6,500 4,400 1,600 Additional information: Note 1 - Included within wages and salaries are: Bonus due to top sales adviser to be paid in February 2022 Pension scheme provisions to be paid 31 August 2021 Note 2-Bad debts: Trade debts written off Increase in general allowance for receivables Note 3 - Professional charges: Accountancy Architect's fees for new shop layout Legal costs for chasing bad debt Note 4 - Subscriptions and donations: Membership fee to local golf club Subscriptions to trade associations Gift Aid payment to charity 2,000 2,800 400 800 240 880 Page 2/11 SECTION A (Continued) Question 1 (continued) Note 5 - Miscellaneous expenses: Office party 656 Gifts of wine to customers 1,160 Removal expenses of new employee 1,360 Compensation to customers for damage from business's product 8,000 Interest on overdue VAT 426 The tax written down values of the business's plant and machinery as at 1 April 2020 were: Main pool 150,420 Transactions in plant, machinery and motor vehicles during the year to 31 March 2021 were as follows: (1) A delivery van which had originally been bought for 23,840 was sold for 15,000. A new van was acquired in November 2020 at a cost of 24,320. The Van had CO2 emissions of 135 g/km. ) A new Audi motor car was purchased by Mark with CO2 emission of 175g/km costing 41,100. There is 25% private use of the Audi motor car by Mark. (iii) Two motor cars were bought for staff. One of these was a new low-emission BMW car with CO2 emissions of 40g/km, this cost 14,000. The other was a Ford and had CO2 emissions of 105g/km and cost 18,000. (iv) Equipment was sold for 25,600. Most of this equipment was sold for less than original cost, but one item was sold for 2,060 more than original cost. New equipment was bought in March 2021 for 54.720. The business claims maximum capital allowances on plant and machinery. Requirement (a) Compute the taxable trading profit. 11 Marks (b) Calculate the tax payable by Mark in respect of the 2020/21 tax year and state when the tax is due for payment. 4 Marks Total 15 Marks

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