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1.in question, miscellaneous expense is given 12000 deducted from gross profit. in notes it is said , miscellaneous includes 3500 qualifying charitable donations to a national charity. our profit per accounts is 240140. what will be the adjusted trading profit?
2. why rental income added in gross profit from trading is deducted while calculating adjusted trading profit?write off debts to customer, 55
write off debts to trade debts ,32
increase in specific allowance against debts,10
recovery of trade debts previously written of, (17)
so total charged in P/L is 80while calculating adjusted trading profit how should we adjust recovery of trade debts and increase in specific allowance against debts
Donation to national charity is disallowable expense – you need to add back to the profit.
What do we know about that rental? If it says that x months was not paid by the tenant, then it is an impairment loss – income which hasn’t been earned and no chance to be paid. In this way it’s an allowable expense. Does it give an answer to your question?
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