DIMAG Ltd, an unquoted trading company, which prepares accounts to 31 March. The draft accounting profits for the year ended 31 March 2024 are £365,300. The following items have been added or deducted in arriving at the draft accounting profit. Depreciation Bonuses Qualifying donation Exempt dividends received Bank interest receivable Notes Note £ 24,200 1 50,000 2 7,600 3 2,700 4,000 1 DIMAG Ltd totalling £50,000 were paid by the company in respect of the period, on 2 March 2025. These were the first bonuses paid by the company. 2 The qualifying donation of £7,600 in the accounts comprises of £6,600 paid during the accounting period and an accrual of £1,000 that the company had agreed to pay but was not paid until 10 July 2024. 3 Exempt dividends of £2,000 were received from unrelated UK companies and £700 received from an unrelated German company. In addition, the following items have not yet been included in the accounts: · Legal fees in relation to an issue of share capital (£1,350) and in relation to new employment contracts (£200). · The company paid £360 for miniature product samples which were given free of charge to potential clients at a trade fair and gifted food hampers to clients costing £1,000. Required: Compute DIMAG Ltd.’s taxable total profits for the year ended 31 March 2024.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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DIMAG Ltd, an unquoted trading company, which prepares accounts to 31 March. The draft accounting profits for the year ended 31 March 2024 are £365,300. The following items have been added or deducted in arriving at the draft accounting profit. Depreciation Bonuses Qualifying donation Exempt dividends received Bank interest receivable Notes Note £ 24,200 1 50,000 2 7,600 3 2,700 4,000 1 DIMAG Ltd totalling £50,000 were paid by the company in respect of the period, on 2 March 2025. These were the first bonuses paid by the company. 2 The qualifying donation of £7,600 in the accounts comprises of £6,600 paid during the accounting period and an accrual of £1,000 that the company had agreed to pay but was not paid until 10 July 2024. 3 Exempt dividends of £2,000 were received from unrelated UK companies and £700 received from an unrelated German company. In addition, the following items have not yet been included in the accounts: · Legal fees in relation to an issue of share capital (£1,350) and in relation to new employment contracts (£200). · The company paid £360 for miniature product samples which were given free of charge to potential clients at a trade fair and gifted food hampers to clients costing £1,000. Required: Compute DIMAG Ltd.’s taxable total profits for the year ended 31 March 2024.

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