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hi..I have a question in relation to adjustment of profits..I don’t have the answer and would like to crosscheck it with u please because it is vinterestg.. P&loss figure for yr ended 30 june 2012 for impaired debt= 200. This fig is made up of the following
trade debts woff 500
staff loan woff 200
allowance for receivables:
As at 1 July 2011 900
As at 30 June 2012 700Trade debt recovered (400)
Loan woff to supplier 250
Loan to a customer recovered (150)
Mary does not carry a money lending business. What is her tax adjusted Trading profit?PleaseYour question should be what is the adjustment of profit! What do you think the answer is? For the future only work examples where the answer is provided as it will be in any proper textbook prepared for this paper!
Ok sir..(staff loan woff 200,loan woff to supplier and loan to customer recovered r irrevelant) I got add back 300 to net profit : tdebt woff 500 is tax allow, decrease in provision is taxable -200 and trade debt recovered is taxable -400 which gives me a taxable fig of -100 overall but 200 was allowed in ploss account.hence i add back 300 the net profit to adjust..i just want to confirm the answer with you please?ok i will henceforth use book only
Hi mr n, firstly an apology for the delay in replying. In respect of your answer the only issue that would need to be clarified is whether the decrease in provision is for a specific provision which is the treatment you have applied or if the provision was a general provision in which case any such movement is ignored for taxation. If this was the case then the allowable figure for tax would be 100 which would then require an add back of just 100 to the accounting profit.
Thanks sir..it is all clear now..Following ur previous advise..I am working only exam kit questions and i got a query on 1 ques on Inheritance tax pg 30 qu 28 Artem bpp kit ..the tax implications i got are 1250 and 17400..ans book says 1250 which am happy but for the 2nd one it says 18650. I DONT AGREE because IHT being calculated on a cumulative basis i believe therefore that the 18650-1250=17400 should be the second tax implication..I am being vfussy about it because this is lifetime transfer and that figure is gona appear as tax already paid on death transfer…please back me up and verfity the question when you are free..thank u in advance
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