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Molten Metal plc is a manufacturer of electrical equipment. The following information is available for the year ended 31 March 2021:

Trading profit

The tax adjusted trading profit for the year ended 31 March 2021 is 2,138,415. This figure is before making any deductions required for:

(1) Interest payable.

(2) Capital allowances.

Interest payable

During the year ended 31 March 2021 Molten Metal plc paid loan stock interest of 22,500. Loan stock interest of 3,700 was accrued at 31 March 2021, with the corresponding accrual at 1 April 2020 being 4,200. The loan is used for trading purposes.

The company also incurred a loan interest expense of 6,800 in respect of a loan that is used for non-trading purposes.

Capital expenditure

The following capital expenditure was incurred during the year ended 31 March 2021 :

18 July 2020 Purchased motor car (1) 12,500

8 August 2020 Purchased equipment 30,000

27 August 2020 Purchased motor car (2) 24,000

30 November 2020 Purchased motor car (3) 13,000

1 February 2021 Sold motor car (1) 7,000

Motor car (1) purchased on 18 July 2020 and sold on 15 March 2021 has CO₂ emissions of 120 grams per kilometre. Motor car (2) purchased on 27 August 2020 has CO₂ emissions of 100 grams per kilometre. Motor car (3) purchased on 30 November 2020 has CO₂ emissions of 48 grams per kilometre.

The tax written down value of the main pool at 1 April 2020 was 21,000 .

Interest receivable

Molten Metal plc made a loan for non-trading purposes on 1 August 2020. Loan interest of 9,800 was received on 31 January 2021, and 3,100 was accrued at 31 March 2021.

The company also received bank interest of 2,600 during the year ended 31 March 2021. The bank deposits are held for non-trading purposes.

Income from property -1

Molten Metal lets out the whole of an unfurnished freehold office building that is surplus to requirements. The office building was let from 1 April 2020 to 30 November 2020 at a monthly rent of 1,200, payable in advance. On 30 November 2020 the tenant left owing two months rent which Molten Metal was unable to recover. During January 2020 the company spent 1,200 decorating the property. The office building was then re-let from 1 January 2021 at a monthly rent of 1,450, on which date the new tenant paid six months rent in advance.

Property income -2

Since 1 February 2015 Molten Metal plc has let out an unfurnished freehold office building that is surplus to requirements. On that date the tenant paid the company 78,800, consisting of a premium of 68,000 for the grant of a six-year lease, and the advance payment of three months rent.

Required:

a) Compute adjusted profit for the year ended 31 March 2021.

(b) Calculate Molten Metal plcs corporation tax liability for the year ended 31 March 2021.

Note: You should ignore any chargeable gain arising from the grant of the lease and also ignore rollover relief.

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