Calculate Total Business Income.

We sum all the income items listed in the statement.

• Sales: $\text{Rs. } 4,00,000$
• Gain on disposal of depreciable assets: $\text{Rs. } 3,00,000$
• Sundry income: $\text{Rs. } 63,000$
• Refund of customs duty: $\text{Rs. } 28,000$
• Bad debt recovered: $\text{Rs. } 30,000$
• Rent from staff quarter: $\text{Rs. } 60,000$
• Gain on sales of vacant land used in business: $\text{Rs. } 1,20,000$
• Interest from credit sales: $\text{Rs. } 30,000$

Total Business Income:

$$4,00,000 + 3,00,000 + 63,000 + 28,000 + 30,000 + 60,000 + 1,20,000 + 30,000 = \text{Rs. } 9,10,000$$

First, we correct the calculation for "Cost of Trading Stock" based on the figures provided in the bracket.
Cost of Trading Stock = (Opening Stock + Purchases + Direct Expenses) - Closing Stock

$$\text{Cost of Trading Stock} = (3,00,000 + 70,000 + 1,00,000 + 2,30,000 + 70,000 + 1,60,000) - 7,00,000$$ $$= 9,30,000 - 7,00,000 = \text{Rs. } 2,30,000$$

Now, we sum all the allowable deductions:

• Cost of Trading Stock: $\text{Rs. } 2,30,000$ (Corrected)
• General expenses: $\text{Rs. } 2,00,000$
• Interest on loan: $\text{Rs. } 50,000$
• Commission and brokerage: $\text{Rs. } 66,000$
• Legal fees: $\text{Rs. } 30,000$
• Entertainment expenses: $\text{Rs. } 40,000$
• Advertisement expenses: $\text{Rs. } 10,000$
• Papers and periodicals: $\text{Rs. } 35,000$
• Utility expenses: $\text{Rs. } 1,60,000$
• Office expenses: $\text{Rs. } 40,000$
• Printing and stationery: $\text{Rs. } 80,000$

Total Allowable Deductions:

$$2,30,000 + 2,00,000 + 50,000 + 66,000 + 30,000 + 40,000 + 10,000 + 35,000 + 1,60,000 + 40,000 + 80,000 = \text{Rs. } 9,41,000$$

Assessable Business Income = Total Business Income - Total Allowable Deductions

$$\text{Assessable Business Income} = 9,10,000 - 9,41,000 = \text{Rs. } -31,000$$

Since the result is negative, it represents a business loss.

$$\text{Assessable Business Loss: Rs. 31,000}$$