Calculation Of Corporate Tax
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1. Calculate Susan's assessable business for the two years of assessment based on her accounts to 30 April 2002. In order to do this:
a) Compute the capital allowances for the year.
b) Calculate the adjusted profit for the year after capital allowances.
c) Calculate the Schedule D Case 1 assessable income for the first two years of assessment, (noting the overlap profit)
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 APRIL 2002
£ £
INCOME 82,530
LESS:
WAGES 11500
COST OF FOODS 18200
COST OF PREMISES 4500
MOTOR EXPENSES 2630
DEPRECIATION:EQUIPMENT 4000
CAR 3000
LOSS ON SALE OF FURNITURE 300
____________
44130
______________
38400
______________
The audit manager has reviewed the file of Sunflower Catering and has noted the following information:
? The wages are all to Susan's son James who works full time as the cook of the business:
? The cost of the premises relates to a kitchen used to prepare food ;
? Motor expenses comprise fuel, insurance etc. in respect of the car used by Susan in the business. Susan's mileage during the period was as follows:
MILES
Delivering to clients 10,000
Obtaining supplies 2000
Personal 3000
______
Total 15,000
? Equipment and vehicles were bought on 01 May 2001 as follows:
£
Fixtures and fittings 1200
Cooking equipment 5400
Computer system 1800
Car 12600
______
21000
Disposal of fixtures cost (1000)
______
20000
Depreciation for the year (7000)
______
Net Book Value 13000
______
The fixtures were surplus to requirements and were sold in March 2002 for £700.
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Solution Summary
Calculation of corporate tax and capital allowances are determined. The adjusted profit for the year after capital allowances are computed.
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Calculation Of Corporate Tax, Calculation of Capital allowances, CalculationMarginal Tax Relief Available Because PCTCT, Calculation Of Corporate Profit:
INCOME AS PER PROFIT AND LOSS ACCOUNT ...
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