Calculate Total Business Income.

Here is the solution to the "Statement of Business Income" based on the provided image. Step 1: Calculate Total Business Income. We sum all the income items listed in the statement. Sales: Rs. 4,00,000 Gain on disposal of depreciable assets: Rs. 3,00,000 Sundry income: Rs. 63,000 Refund of customs duty: Rs. 28,000 Bad debt recovered: Rs. 30,000 Rent from staff quarter: Rs. 60,000 Gain on sales of vacant land used in business: Rs. 1,20,000 Interest from credit sales: 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 = Rs. 9,10,000 Step 2: Calculate Total Allowable Deductions. 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 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 = Rs. 2,30,000 Now, we sum all the allowable deductions: Cost of Trading Stock: Rs. 2,30,000 (Corrected) General expenses: Rs. 2,00,000 Interest on loan: Rs. 50,000 Commission and brokerage: Rs. 66,000 Legal fees: Rs. 30,000 Entertainment expenses: Rs. 40,000 Advertisement expenses: Rs. 10,000 Papers and periodicals: Rs. 35,000 Utility expenses: Rs. 1,60,000 Office expenses: Rs. 40,000 Printing and stationery: 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 = Rs. 9,41,000 Step 3: Calculate Assessable Business Income (or Loss). Assessable Business Income = Total Business Income - Total Allowable Deductions Assessable Business Income = 9,10,000 - 9,41,000 = Rs. -31,000 Since the result is negative, it represents a business loss. Assessable Business Loss: Rs. 31,000 3 done, 2 left today. You're making progress.