Question 33a
Mable is a serial entrepreneur, regularly starting and disposing of businesses. On 31 July 2015, Tenth Ltd, a company owned by Mable, ceased trading. On 1 October 2015, Eleventh Ltd, another company owned by Mable, commenced trading. The following information is available:
Tenth Ltd
(1) For the final four-month period of trading ended 31 July 2015, Tenth Ltd had a tax adjusted trading profit of £52,400. This figure is before taking account of capital allowances.
(2) On 1 April 2015, the tax written down value of the company’s main pool was £12,400. On 3 June 2015, Tenth Ltd purchased a laptop computer for £1,800.
On 31 July 2015, the company sold all of the items included in the main pool at the start of the period for £28,200 and the laptop computer for £1,300. None of the items included in the main pool was sold for more than its original cost.
(3) On 31 July 2015, Tenth Ltd sold the company’s freehold office building for £180,300. The building was purchased on 3 May 2011 for £150,100, and its indexed cost on 31 July 2015 was £164,500.
(4) During the four-month period ended 31 July 2015, Tenth Ltd let out one floor of its freehold office building which was always surplus to requirements. The floor was rented at £1,200 per month, but the tenant left owing the rent for July 2015 which Tenth Ltd was unable to recover. The total running costs of the office building for the four-month period ended 31 July 2015 were £6,300, of which one-third related to the let floor. The other two-thirds of the running costs have been deducted in calculating Tenth Ltd’s tax-adjusted trading profit of £52,400.
(5) During the four-month period ended 31 July 2015, Tenth Ltd made qualifying charitable donations of £800.
Required:
(a) Calculate Tenth Ltd’s taxable total profits for the four-month period ended 31 July 2015. (7 marks)