[farrukh090]

That was client acceptance

[farrukh090]

Interesting question.

I am also a student of F6 dec sitting, but want to solve this question as per my knowledge.

First of all car is exempt from VAT as per question the Company’s trading activity is not a buy or sell car so we will use list price exclusive of VAT.

– We always use list price before trade discount so we should neglect 15% discount.

– Insurance, servicing, maintenance , up keeping are exempt for the calculation of cost of car as these are bear by company.

– You as a manager opted to deduct 500 for the petrol which is not allowable as you are not paying in full so full fuel benefit will be calculated.

Cost of the car will be 15000
Car benefit will be 15000*17% = 2550
Fuel benefit will be 18800*17% = 3196

I am waiting for exact answer by tutor.

And also your comments are welcome…

[farrukh090]

Yeah 5000 is an opportunity cost…

[farrukh090]

Hi,

First of all you have to know about sec.64 which clearly states that if you want to set of your loss then you can set off against total income of current year and or previous year, now you have a choice to set off first from current then previous or previous first then current. The main concept of setting off trading losses is tax savings. If you can save more in tax previous year then go first to sett off against total income of previous year then current.

I hope my answer cleared your confusions, if not then experts advice is better to go with…

Thanks

Farrukh

[Author]

Posts