20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Fubuki Co (dec10)

This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
July 9, 2021 at 2:13 pm #627279
nbhutia
Participant
- Topics: 34
- Replies: 24
Hi Sir,
I’m trying to figure out taxable profits answer. So profit less the allowance but I can’t figure out where is allowance comes from?
I understand it’s on tax allowable from on plant and machinery. Which has a scrap of £400,000. Straight line method with 25% tax. I thought the ppe is £3m-0.4scrap /4yrs * 25% but it’s wrong.
The allowance is 650 pa?
Thank you in advance.
July 10, 2021 at 9:37 am #627331
John Moffat
Keymaster
- Topics: 57
- Replies: 54701
The allowance is (3,000 – 400)/4 = $650 per year.
(This reduces the taxable profit which does result in a tax saving of 650 x 25% = $162.50 a year. The tax payable is $162.50 less than it would have been if there had not been any allowance.)
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.