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$ Profit Tax Question REQUIRED: Prepare the Hong Kong profits tax computation for Greenwich Ltd for the year of assessment 2020/21. Greenwich Ltd carries on a trading business in Hong Kong. The company has earned net income of $2,700,000 for the year ending on 31 March 2021, which was arrived at after charging and crediting the following items:- Note Income: Rental income 360,000 Interest income 2 16,000 Dividend income 27,000 Expenses: Bad debts 33,000 Depreciation expenses 210,000 Interest expenses 269,500 Legal and professional fee 134,200 Repairs and maintenance 6 87,000 Taxation 7 654,200 1 3 4 5 $ Notes: 1. The company owns an office premises in Quarry Bay which was let at a monthly rent of $30,000. Property tax on the rental income has been paid (see note 7). 2. Interest income: Interest on long-term deposit 5,000 Interest on time deposits placed with HSBC in Hong Kong* 11,000 The deposits were used to guarantee the bank overdraft facility (see note 4 below) 3. Bad debts expenses: Increase in general allowance (at 2% on trade debts outstanding) 43,0004 Increase in specific allowance 20,000 Recovering of trade debts written off (30,000) 4. Interest expenses: Overdraft interest to Hang Seng Bank (secured by time deposits) 165,500 Loan interest to Bank of Asia (secured by a mortgage over the director's quarters) 72,000 Surcharge for late payment of tax 32,000 5. Legal and professional fees: Audit fee 80,000 Recovery of trade debts 7,000 Others (allowable) 47,200 6. Repairs and maintenance: Replacement of carpet 24,000 Maintenance of office equipment 15,000 Replacement of a LCD television 48,000 7. Taxation: Property tax paid for 2020/21 43,2004 Profits tax paid and provision for 2020/21 611,000 8. Total depreciation allowances for the year have been agreed with the assessor to be $423,000.- $ Profit Tax Question REQUIRED: Prepare the Hong Kong profits tax computation for Greenwich Ltd for the year of assessment 2020/21. Greenwich Ltd carries on a trading business in Hong Kong. The company has earned net income of $2,700,000 for the year ending on 31 March 2021, which was arrived at after charging and crediting the following items:- Note Income: Rental income 360,000 Interest income 2 16,000 Dividend income 27,000 Expenses: Bad debts 33,000 Depreciation expenses 210,000 Interest expenses 269,500 Legal and professional fee 134,200 Repairs and maintenance 6 87,000 Taxation 7 654,200 1 3 4 5 $ Notes: 1. The company owns an office premises in Quarry Bay which was let at a monthly rent of $30,000. Property tax on the rental income has been paid (see note 7). 2. Interest income: Interest on long-term deposit 5,000 Interest on time deposits placed with HSBC in Hong Kong* 11,000 The deposits were used to guarantee the bank overdraft facility (see note 4 below) 3. Bad debts expenses: Increase in general allowance (at 2% on trade debts outstanding) 43,0004 Increase in specific allowance 20,000 Recovering of trade debts written off (30,000) 4. Interest expenses: Overdraft interest to Hang Seng Bank (secured by time deposits) 165,500 Loan interest to Bank of Asia (secured by a mortgage over the director's quarters) 72,000 Surcharge for late payment of tax 32,000 5. Legal and professional fees: Audit fee 80,000 Recovery of trade debts 7,000 Others (allowable) 47,200 6. Repairs and maintenance: Replacement of carpet 24,000 Maintenance of office equipment 15,000 Replacement of a LCD television 48,000 7. Taxation: Property tax paid for 2020/21 43,2004 Profits tax paid and provision for 2020/21 611,000 8. Total depreciation allowances for the year have been agreed with the assessor to be $423,000

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