ACCA TX ^UK Syllabus E. Corporation Tax Liabilities - The carry back of a loss - periods of less than 12 months - Past Papers ^{8 / 14}

June 2016 ^Sample

350 others answered this question

Question 6b ii

Jump Ltd’s summarised statement of profit or loss for the three-month period ended 31 March 2015 is as follows:

	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)

Previous results
Jump Ltd’s results for its two previous periods of trading are as follows:

	Year ended 31 May 2014 £	Period ended 31 December 2014 £
Tax adjusted trading profit	78,600	42,400
Bank interest receivable	1,200	0

Rates of corporation tax
Jump Ltd has always paid corporation tax at the small profits rate of 20%, and expect to continue to do so in respect of future profits.

Required:
(b) (ii) Advise Jump Ltd as to the maximum amount of its trading loss which can be relieved against its total profits for the year ended 31 May 2014 and the seven-month period ended 31 December 2014. (2 marks)

Reveal answer

June 2015

327 others answered this question

Question 5b

Retro Ltd’s summarised statement of profit or loss for the year ended 31 March 2015 is as follows:

	Note	£	£
Gross profit			127,100
Operating expenses
Depreciation		27,240
Gifts and donations	1	2,300
Impairment loss	2	1,600
Leasing costs	3	4,400
Other expenses	4	205,160
			(240,700)
Finance costs
Interest payable	5		(6,400)
Loss before taxation			(120,000)

Previous results
Retro Ltd commenced trading on 1 September 2012. The company’s results for its two previous periods of trading are as follows:

	Year ended	Period ended
	31 August 2013	31 March 2014
	£	£
Tax adjusted trading profit	56,600	47,900
Bank interest receivable	1,300	0
Qualifying charitable donations paid	(540)	(330)

Future results
Retro Ltd is expected to return to profitability in the year ended 31 March 2016 and to continue to be profitable in subsequent years.

Required:
(b) Assuming that Retro Ltd claims relief for its trading loss as early as possible, calculate the company’s taxable total profits for the year ended 31 August 2013 and for the seven-month period ended 31 March 2014. (4 marks)

Reveal answer