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14 Grace: Practice Questions

Grace started a trade on May 1, 2019. Profits before capital allowances for three periods were provided: £128,360 from May 2019 to July 2020; £88,013 from August 2020 to July 2021; and £75,727 from August 2021 to July 2022. Plant and vehicle purchases on various dates were also provided. The vehicle was sold on May 1, 2022. Calculate the trading profit assessments for the opening tax years, claiming maximum capital allowances. David traded for many years until ceasing on June 30, 2021. Trading profits before capital allowances for the last three years were provided. Expenditure on plant on two dates was also provided. All plant was sold on June 30

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36 views1 page

14 Grace: Practice Questions

Grace started a trade on May 1, 2019. Profits before capital allowances for three periods were provided: £128,360 from May 2019 to July 2020; £88,013 from August 2020 to July 2021; and £75,727 from August 2021 to July 2022. Plant and vehicle purchases on various dates were also provided. The vehicle was sold on May 1, 2022. Calculate the trading profit assessments for the opening tax years, claiming maximum capital allowances. David traded for many years until ceasing on June 30, 2021. Trading profits before capital allowances for the last three years were provided. Expenditure on plant on two dates was also provided. All plant was sold on June 30

Uploaded by

Ivy Njoroge
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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ACCA Taxation (TX-UK) (FA2019) 223

Practice Questions Paper TX-UK

14 Grace
Grace starts a trade on 1 May 2019, and has the following results (before capital allowances).
Period of account Profit
£
1 May 2019 – 31 July 2020 128,360
1 August 2020 – 31 July 2021 88,013
1 August 2021 – 31 July 2022 75,727

Plant is bought as follows:


Date Cost
£
1 May 2019 Plant 69,500
1 Dec 2019 Car (85g /km) 21,600
1 Oct 2020 Machinery 40,000
1 Feb 2022 Plant 25,000

On 1 May 2022, the car purchased on 1 December 2019 was sold for £13,000. The car was used by the sales
manager of the business throughout the perid of ownership with 60% business use and 40% private use.
Calculate the trading profit assessments for the opening tax years as far as the available information
permits, assuming maximum capital allowances are claimed.

Assume that the capital allowance rates applicable to the 2019/20 tax year apply throughout.

15 David
David traded for many years preparing accounts to 5 April when he ceased trading at 30 June 2021. Trading
profits (before capital allowances) have been as follows:
Year ended £
5 April 2020 25,000
5 April 2021 27,000
Period to 30 June 2021 14,000

Expenditure on plant had been as follows:


£
Date Cost
1 June 2019 2,800
1 October 2020 4,600

All items of plant were sold on 30 June 2021 for £4,000 (no item was sold for more than cost).
The written down value of the main pool as at 6 April 2019 was £14,800. Overlap profit from commencement
was £2,000
Calculate the trading profit assessments for the final three tax years of assessment.

Assume that the capital allowance rates applicable to the 2019/20 tax year apply throughout

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