Mrs. Victoria Mfon who resides in Calabar, has been trading for several years. The statement of comprehensive income of her business for the year ended 31st December, 2014 is as shown below:

Here is the calculation of the assessable profit for Mrs. Victoria Mfon for the year ended 31st December, 2014.

Assumptions for Tax Adjustments:

• Entertainment expenses: Generally disallowed for tax purposes unless specifically for staff welfare and within limits. We assume it is fully disallowed.
• Donations: Generally disallowed for tax purposes unless made to approved bodies and within statutory limits. We assume it is fully disallowed.
• Profit on sale of vehicle: This is considered a capital gain, which is typically taxed separately under Capital Gains Tax and therefore excluded from business income for income tax purposes.
• Defalcation and embezzlement: This is treated as an allowable business loss if incurred in the course of business operations and not recoverable.
• All other expenses are assumed to be wholly, exclusively, necessarily, and reasonably incurred for the purpose of the business and are therefore allowable.

Step 1: Calculate the Net Profit as per the provided statement of comprehensive income.

\begin{array}{l r} Income & N \\ Gross profit & 1,716