Afro Insurance Ltd. underwrites three classes of insurance. The management has provided you with the details shown below on their operations for the…

3.          The company paid Sh.745,000 to ABC Investment Management Services, their fund managers for professional services for the year ended 31 December 2001.

4.          The company owns Afro House which houses its offices.  Part of the office space is rented out to other tenants.  In the year to 31 December 2001, the company received sh.2,200,000 net rental income from their estate agents.  Property management fees amounting to sh.2,400,000 for the year to 31 December 2001 had been deducted. 

5.          Afro Insurance Ltd. owns 80% of the ordinary share sin KELP Ltd. a locally incorporated company.

Required:

(a)         Compute the taxable profit or loss for Afro Insurance Ltd. for the year ended 31 December 2001.

                                                                                                                                    (16 marks)

(b)        Compute the tax payable in (a) above.                                                                 (2 marks)

(c)         Comment on any information you have not used in your computations.               (2 marks)

                                                                                                                        (Total: 20 marks)

Receipts:Opening balance70%30% WEEK1 WEEK2 WEEK3 WEEK4 WEEK5 WEEK6 1,00024,000_____ 7,00016,8007,200 9,10021,0007,200 28,00016,8009,000 54,30012,6007,200 52,800 24,000 24,000…

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