Problem: MKG operates in the tax jurisdiction of D-land where the currency is the D$. D-land disallows entertainment costs and dividends received for tax purposes. Tax relief for trading losses is available by carrying the loss forward against future trading profits. For the year ending 31 December 20X3 the accounting profit is D$40,000. On 01 January 20X3 MKG sold an asset with a carrying amount of D$10,000 for D$7,000. The tax base for the asset is D$9,000. During the year entertaining costs amounted to D$13,000 and dividends received were D$60,000. Forecast taxable profit for year ending 31 December 20X4 is D$530,000. What is the taxable profit/loss for the years ended 31 December 20X3 and 20X4 (after deducting loss relief)? Solution A. Taxable loss to 31 December 20X3: D$6,000. Taxable profit to 31 December 20X4: D$522,000. B. Taxable loss to 31 December 20X3: D$6,000. Taxable profit to 31 December 20X4: D$524,000. C. Taxable loss to 31 December 20X3: D$8,000. Taxable profit to 31 December 20X4: D$522,000. D. Taxable loss to 31 December 20X3: D$8,000. Taxable profit to 31 December 20X4: D$524,000.