Sales Rs 5,000,000

Cost of sales 3,500,000

Gross Profit 1,500,000
Expenses:
Salaries Expense 400,000
Freight expense 150,000
Depreciation expense 200,000
Advertising expense 60,000
Provision for Dividend 70,000
Tax deducted by Customer 40,000
Auditor's Fee 80,000
Bad debt expense 10,000
Purchased equipment 30,000
Contribution to employees' PF 300,000
Commission 200,000
Total Expenses 1,540,000
Net loss 40,000
 Arena Ltd
Net loss (40000.00)
Add:
Depreciation expense 200,000
Provision for Dividend 70,000
Tax deducted by Customer 40,000
Bad debt expense 10,000
Commission 10,000
Advertising expense 10,000
Purchased equipment 30,000

Less:
Depreciation expense (135,000)

Taxable Income 195,000

Tax Liability 56,550
 Star & Co Ltd
Net loss (200,000)
Add:
Depreciation expense Accounting 80,000
Prepaid Salaries 150,000
Tax Deducted on Salaries Not Submitted 100,000
Loss On Sale of Furniture 5,000
Less:
Depreciation expense (120,000)
Gain On Sale of Equipment (10,000)

Taxable Income 5,000

Tax Liability 1,450
Tax at source deducted by customers Rs.45,000
Salary paid o partner-A 100,000
Salary paid o partner-B 80,000
Interest paid to partner-A 12,000
Income tax for previous year 20,000
Salary per month paid to an employee tax was deducted and deposited 30,000
Contribution to recognized provident fund 40,000
Donation paid to approved institution 30,000
Donation paid to unapproved institution 5,000
Manager of the firm was paid the following amounts:
Salary 40,000
Perquisites 20,000
Accounting depreciation 60,000
Provision for bad debts 5,000
Gain on sale of Car 10,000
Freight expenses were paid by cash. 60,000
 XYZ & Company
Net Profiit 800,000
Add:
Depreciation expense 60,000
Tax at Source 45,000
Salary-Partner A 100,000
Salary-Partner B 80,000
Interest Paid - Partner A 12,000
Income Tax 20,000
Donation paid to approved institution 30,000
Donation paid to unapproved institution 5,000
Provision for bad debts 5,000
Less:
Depreciation expense (65,000)

Taxable Income 1,092,000

Tax Liability 316,680
 Salary Income
Qno.1
Solution

Particulars Calculation Amount

Basic Salary 40000*12 480,000
House Rent Allowance 5000*12 60,000
Utilities Allowance 4000*12 48,000
Conveyance Allowance 600000*5% 30,000
Gross Salary