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Dear open tuition lecturer my question goes like this.
Scuba Ltd acquired a lease office building that is used for bussiness purposes. The company paid premium of 80000 of a grant of 20 year. What is the amount to include in the adjusted trading profit. Thanksuse the formula that is
premiun*2%(years – 1)
80000*0.02(20-1)
= 30400
80000-30400=46900there is another formula too that wi (50-years / 50)*premium
ll come straight forward for the answer
50-20/51 *80000 = 47058 (the answer will be a bit different because of decimal figure coming in when calculation first part) but i think so we can go for any of them………Yes lingling2000, once you have calculated the figure of 46900 this is then divided by 20 years and should be used at the final figure deducted from trading profit for that year
hi there, I’m a bit confused with this idea of allocating the 49600. how come in the mock 2 question 2 ( helium ) the premium on the property is not allocated over the 7 years of the lease.
please help
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