Question 6a
Note | £ | £ | |
---|---|---|---|
Revenue | 264,900 | ||
Operating expenses | |||
Depreciation | 8,100 | ||
Employee costs | 1 | 189,700 | |
Lease of motor car | 2 | 1,200 | |
Professional fees | 3 | 7,800 | |
Other expenses | 4 | 202,800 | |
(409600) | |||
Operating loss | (144700) | ||
Bank interest receivable | 0 | ||
Loss before taxation | (144700) | ||
Note 1 – Employee costs | |||
Employee costs are as follows: | £ | ||
Employee training courses | 3,400 | ||
Employee pension contributions paid | 11,600 | ||
Cost of annual staff party (for eight employees) | 1,500 | ||
Balance of expenditure (all allowable) | 173,200 | ||
189,700 |
Note 2 – Lease of motor car
The lease is in respect of a motor car with CO2 emissions of 189 grams per kilometre.
Note 3 – Professional fees
Professional fees are as follows:
£ | |
---|---|
Accountancy | 2,200 |
Legal fees in connection with the issue of share capital | 3,800 |
Legal fees in connection with the renewal of a 20-year property lease | 1,800 |
7,800 |
Note 4 – Other expenses
Other expenses are as follows:
£ | |
---|---|
Entertaining UK customers | 1,700 |
Entertaining overseas customers | 790 |
Political donations | 800 |
Balance of expenditure (all allowable) | 199,510 |
202,800 |
Additional information
Plant and machinery
On 1 January 2015, the tax written down values of Jump Ltd’s plant and machinery were as follows:
£ | |
---|---|
Main pool | 12,100 |
Special rate pool | 5,700 |
Date of sale | Proceeds | Original cost | |
---|---|---|---|
£ | £ | ||
Motor car [1] | 7 January 2015 | 9,700 | 9,300 |
Motor car [2] | 29 March 2015 | 6,100 | 13,200 |
The original cost of motor car [1] was added to the special rate pool when it was purchased, and the original cost of motor car [2] was added to the main pool when it was purchased.
Required:
(a) Calculate Jump Ltd’s tax adjusted trading loss for the three-month period ended 31 March 2015.
Notes:
1. Your computation should commence with the operating loss figure of £144,700, and should list all of the items referred to in notes (1) to (4), indicating by the use of zero (0) any items which do not require
adjustment.
2. You should assume that the company claims the maximum available capital allowances. (10 marks)