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Hi Sir,
In the answer provided, interest is calculated by minus pension paid plus company contribution.
It states that these transactions were made at the start of year (OB date is 1 Feb) so I do not understand why they are included in the interest calculation.
Thanks in advance Sir.
NIC should be calculated on opening balances
The question writer is saying that, as pensions were paid on the first day of the year, we should reduce the opening asset and liability before calculating the interest. Also we should increase opening assets by contribution.
Never seen this in an exam question. I think these are unrealistic assumptions – it’s not how pensions are paid or contributions are made.So I wouldn’t worry about it. Move on 🙂
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