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YE 15mts to 30.6.2017
Bank interest (received 30 sep 2016) 22000
Bank interest accrued as follows
At 1april 2016. 5200
At 31 march 2017 4100
At 30 june 2017 9780Answer: y.e 31.3.2017 3mts to 30.6.17
interest income
(22000-5200+4100) 20900
(9780-4100) 5680Doubt: sir could you please explain this working as in why have we deducted 5200 from 22000 and added 4100 in y.e march 2017 and then why have we deducted 4100 from 9780 in the second CAP?
Thankyou
I think I have to ask you a question – have you passed an Accounting exam – as this is the accruals system in operation. This is an accounting question not a tax question.
Remember the basis of assessment for interest income is interest receivable (we work on an accruals basis not a received basis) and as you have picked up if we are dealing with a long period of account we must prepare 2 CT Computations, the first for 12 months and the second for the balance of months – hence here for the 12 months to 31 March 2017 and the 3 months to 30 June 2017.
If you were preparing the accounts for the 12 months to 31 March 2017, what would be the interest receivable in that period – as that is what you want here for tax purposes. The amount received in the accounting period less the opening accrual (this was receivable in the year ended 31 March 2016) plus the closing accrual (the amount receivable at 31 March 2017).
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