[onyxera]

Question 3 required calculation of Fergus Income tax, NIC (employee and employer), and corporation tax, and then compare the totals with the trading & NIC liabilities already given in the question. It would be more favorable if Fergus incorporates his business, than continue to trade unincorporated.
Question 2 on Share disposal required the set up of a share pull for acquisitions/disposal from Pluto remembering to index prior to ‘operative events’ i.e. the first 10,000 shares disposed from acquisitions from Pluto.
Question 1: The unused nil rate band is transferred and used-up on the chargeable lifetime transfer.
Question 6: Adjusting trading loss. Same add back deductions not allowed technique. Ended up with a reduced adjusted trading loss. Carry back loss relief max 12 months, so I think only 5/12 of the lost relief in the year ended Aug 2013 was available.
Question 4: On VAT, I think the figures were all VAT-inclusive, hence use the VAT fraction 1/6 to get the VAT. The flat rate scheme, the 12% flat rate * Taxable supplies (Standard, zero-rated & exempt supplies). It wasn’t profitable to use the flat rate.
Question 5: Employment income. I don’t remember all, but the lease car should have 15% disallowed, the 2 mobile phones, the taxable benefit is 20% * cost (for one), the living accommodation had the rateable value and additional benefit as the cost of providing the house exceeded 75,000. The travel expense mileage from work to the office (cant remember the Coy’s name) is not an allowable deduction. I think other mileages are allowed, so multiply with the amount the Coy reimbursed.

Treatment of Unused Indexation Allowance: The indexation allowance cannot serve to create/or increase a loss. If the coy’s already makes a loss, then indexation allowance is forfeited, if the indexation allowance is greater than unindexed gain, the gain is reduced to Nil, remaining indexation allowance is lost.

Multiple choice questions (strange how you all remember your answers, let me try).
Tax evasion is illegal
The child benefit income tax charge is 531
The trustees pay additional tax on CLT after 6 months (31 July)
2 ties for the dude who doesnt want to be UK resident
I give up (cant remember anything, but MCQ’s were a bit easy)

I shouldn’t forget to thank open tuition, and wish you all success

[onyxera]

Hello Annie, the question you have (i.e. on Peter) is a parts disposal. Therefore, the cost of the part disposed is expressed as Cost * A/A+B where A = value of part disposed, B = market value of remaining asset.
Thus, you would proceed with the chargeable gains pro-forma same way, see below

Disposal Proceeds 12,000
Less Incidental Cost (500)
Net Proceeds: 11,500
Less Allowable Cost (6,000)
26,000 * 12,000/(12,000+40,000)
Chargeable Gains 5,500

Don’t forget, the incidental cost incurred relates to the parts disposal and is brought into the gains computation as a deduction from your disposal proceeds.

On how to approach a chargeable gains question, from my understanding on the open tuition videos, the main problem is knowing what allowable cost to associate with the disposal i.e. the other elements e.g. disposal proceeds etc are given in the question. To know what cost you need to know what asset is being disposed i.e. is it exempt, is a chattel, is it a non-chattel wasting asset, is it shares/securities, is it a part disposal etc..once you figure that out, apply the rules. Always also know that any incidental cost always relate to that disposal at hand, always bring it in.

I have captured my understanding thus far, also go thru the open tuition lectures, they are amazing.

[onyxera]

@ lwitiko, personally I find open tuition lectures straightforward and easy to comprehend. What I do is listen to the lectures, read the notes and solve as much past questions and examples I can lay my hand on (from other text materials as well). So far, its worked for me…..best wishes in 2014

[onyxera]

i forgot d 1000 small panels,,,OMG :(…….thanks guys, best wishes

[onyxera]

Thanks OpenTuition, Thanks Mr John Moffat. I owe you guys a million. I found Dec 2013 F5 to be very easy, and all I read were your notes and watched the videos.
I attempted all 5 questions (I knew all 5 :))
I guess I was just too lucky, the last thing I read this morning was Environmental Accounting, so I had those 5 marks
@ umerazizch – yeah, the optimum plan was 1800 large panels, 300 small panels. Max profit was about 3.something million (cant remember exactly).
Operational variances (Price and Usage) were Favorable, the manager did extremely well.
On further processing, further process 1st 2 items (cant remember what they are called, stop further processing of the third)
On learning curve, (just apply Mr Moffats technique in the videos – though the formula could still work but if you notice the cummulative numbers were doubling i.e. 2, 4, 8 etc) for cummulative batches up to Oct. So abandoning the Learning formula, the cumm average time = learning rate(0.88) * average time for the 1st. The 1st took 200 hrs, the avg time for the next = 200 * 0.88 and so on. Steady state occurs after this, calculate the hours for the 8th batch (Cumm 8 – Cumm 7) and apply to all other cumm batches after this.
On financial performance, Net Margin and Gross Margin. Calculate and discuss this. Note the increase in payroll cost. Was this justified? Also the ad campaign investment, treat this as capital employed (though it isnt 🙂 the assumption I made is Fixed Asset less current liabilities (Capital employed) remained unchanged over both periods)) and compute ROCE. Was that investment justified? Yes – market share increased, No – when we didnt make that investment in 2012, we had better returns for the 0.5m. We certainly do need further information, both for the financial and non financial performance measures.
On advantages and disadvantages of involving the senior staff, that was on buttom up – participatory style of budgeting. Disadvantages – it takes a lot of time, managers could build slack. Advantages – senior staff are closer to the shop floor, so they can make realistic inputs, particpation would motivate managers

[onyxera]

thanks open tuition, I read only your materials without attending any other form of tutorials and I passed, thanks thanks thanks !!!planning to do same for papers F4,F5,F6

[onyxera]

Would tell you the rule I use, and it fits in nicely. The rule is “credit the giver, debit the receiver”. When you make sales there are 2 a/c Sales account and Cash/Receivables account. Now ask yourself which account is giving which account. sales is giving either cash or receivables ‘value’, so using that simple convention, CR sales (it is giving value i.e. the giver), DR cash/receivables (it is receiving value i.e. the receiver). Try this for any double entry scenario. All you need know is which 2 accounts are involved.

But also, you need to know that cash/receivables are current asset, and like all asset accounts have a debit balance.
A credit entry represents 3 things
– An item of income
– An increase in liability/capital
– A decrease in asset
Now when you makes sales, you reduce inventory (assets). so you need to CR sales account, because
(1) You have reduced assets (inventory)
(2) Sales or revenue are also income. Because when you makes sales, cash flows inward (income) so CR sales.

[onyxera]

Hello, my understanding is for Cash sales debit Cash, credit Sales. That is the end of that transaction. You keep a record of credit sales because you want to know exactly what sales your customer bought that forms accounts receivable (most probably for reconciliation purposes). Once a customer pays you cash, DR Cash CR Sales that is the end of that transaction and there is no need to keep records. Also note that at the end of the period, the total in the sales journal would be CR to the sales account.

[Author]

Posts