High School

We appreciate your visit to Greenzone Ltd runs a business providing environmental guidance The company s summarized statement of profit or loss for the year ended 31 March 2013 is. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!

Greenzone Ltd runs a business providing environmental guidance. The company’s summarized statement of profit or loss for the year ended 31 March 2013 is as follows:

**Gross Profit**: £404,550

**Expenses**:
- Depreciation: £28,859
- Repairs and renewals: £28,190
- Legal and accountancy charges: £4,504
- Subscriptions: £8,965
- Salaries and wages: £45,000
- Rent and rates: £1,420
- Travel: £8,900
- Marketing expenses: £7,653
- Electricity, water, and telephone: £5,700
- Other expenses: £107,801

**Net Profit**: £157,558

### Additional Information

1. **Repairs and Renewals**:
- Repainting the exterior of the company’s office building: £8,390
- Extending the office building to create a new reception area: £19,800

2. **Other Expenses**:
- Entertaining UK customers: £3,600
- Entertaining overseas customers: £1,840
- Political donations: £740
- Donation to a charity (free advertising in the charity’s newsletter, not qualifying charitable donation): £430
- Gifts to customers (pens costing £30 each, not displaying Greenzone Ltd’s name): £660
- Gifts to customers (clocks costing £65 each, not displaying Greenzone Ltd’s name): £910

3. **Legal and Accountancy Charges**:
- Debt collection service: £2,396
- Audit and accountancy: £1,288
- 45-year lease on new premises: £820

4. **Travel**:
- Included in the travel expenses is £3,000 as travel expenses for the director’s visit to the USA. This was a family voyage when the director was on holidays.

5. **Plant and Machinery**:
- On 1 April 2012, the tax written down values of plant and machinery were as follows:
- Main pool: £56,700
- Special rate pool: £12,400
- The following transactions took place during the year ended 31 March 2013:
- 14 May 2012: Sold a motor car: £18,100
- 18 July 2012: Sold all items included in the special rate pool: £9,300
- 27 January 2013: Purchased a motor car: £13,700
- The motor car sold on 14 May 2012 for £18,100 was originally purchased during the year ended 31 March 2012 for £17,200. This expenditure was added to the main pool.
- The motor car purchased on 27 January 2013 for £13,700 has a CO2 emission rate of 120 grams per kilometre. The motor car is used as a pool car by the company’s employees.

### Required:
Calculate Greenzone Ltd’s tax-adjusted trading profit for the year ended 31 March 2013.

Answer :

To calculate Greenzone Ltd's tax adjusted trading profit for the year ended 31 March 2013, we need to make adjustments to the profit figures provided based on the additional information given.

First, we will adjust the repairs and renewals expenses. The cost of repainting the office building (£8,390) and extending the building for the new reception area (£19,800) should be added to the property's cost and capitalized rather than expensed.

Next, we need to adjust the other expenses. The amounts spent on entertaining UK customers (£3,600), entertaining overseas customers (£1,840), and political donations (£740) are not allowable deductions for tax purposes. The donation to the charity (£430) is also not a qualifying charitable donation and should be excluded. However, the cost of gifts to customers (£660 for pens and £910 for clocks) can be included as allowable deductions.

For legal and accountancy charges, the debt collection service (£2,396) and audit and accountancy fees (£1,288) are allowable deductions. However, the cost of the 45-year lease on new premises (£820) should be capitalized and treated as a capital expenditure.

The travel expenses for the director's personal trip to the USA (£3,000) should be excluded as it is a personal expense and not related to business activities.

Regarding the plant and machinery, we need to account for the disposals and acquisitions. The motor car sold for £18,100 has a written down value of £17,200, resulting in a balancing charge of £900. The special rate pool items sold for £9,300 will reduce the pool's value. The new motor car purchased for £13,700 with a CO2 emission rate of 120 grams per kilometer will be added to the main pool.

By making these adjustments, we can calculate the tax adjusted trading profit for Greenzone Ltd for the year ended 31 March 2013. This will involve deducting the disallowed expenses, adding back the capitalized expenses, and accounting for the plant and machinery adjustments.

The tax adjusted trading profit for Greenzone Ltd for the year ended 31 March 2013 can be calculated by making the necessary adjustments to the profit figures provided. These adjustments involve capitalizing certain expenses, excluding non-qualifying expenses, and accounting for disposals and acquisitions of plant and machinery.

To know more about Expenses visit-

brainly.com/question/30461188

#SPJ11

Thanks for taking the time to read Greenzone Ltd runs a business providing environmental guidance The company s summarized statement of profit or loss for the year ended 31 March 2013 is. We hope the insights shared have been valuable and enhanced your understanding of the topic. Don�t hesitate to browse our website for more informative and engaging content!

Rewritten by : Barada