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British American is a resident insurance company carrying out both general and life assurance businesses in Kenya. The following information relates to the insurance companys financial year ended 31 December 2021:

	General insurance Business	Life assurance Business
	Ksh. 000	Ksh. 000
Insurance premiums received	60,750	96,900
Premiums returned on surrendered policies	8,000	6,000
Re-insurance commission ceded	8,000	-
Premiums paid to re-insurance company	5,000	-
Management expenses	8,400	26,500
Traveling expenses	2,800	3,400
Advertising expenses	364	820
General expenses	8,500	5,600
Bad debts written off (specific)	700	900
Income from exercise of subrogation rights	750	-
Rent and rates	600	450
Staff training expenses	5,000	4,000
Depreciation of equipment	900	3,100
Fines and penalties for late payment of tax	850	3,450
Repairs and maintenance	550	950
Claims recovered on re-insurance	1,750	-

Additional information

1. Reserves for unexpired risk for general insurance business was as follows:

	General
	Business
	Ksh. 000
1 January 2021	5,200
31 December 2021	2,700

2. Claims outstanding were as follows:

	General insurance	Life assurance
	Business	Business
	Ksh. 000	Ksh. 000
1 January 2021	6,600	4,400
31 December 2021	2,200	2,800

3. Claims paid during the year ended 31 December 2021amounted to Ksh. 17,600,000 for General insurance business and Ksh. 16,900,000 for Life assurance business.

4. The life fund balance was estimated to be ksh 180 million out of which the actuary recommended that ksh 84 million to be transferred to the shareholders

5. Income from subrogation ksh 12.8 million.

6. Capital allowances was agreed with KRA at ksh. 6million.

Required:

(i)Determine the taxable income or loss of British American Insurance Company Ltd. for the year of income 2021.(12 marks)

(ii)Tax payable (if any) by the insurance company (3 marks)

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