BTC Dec06

cat12

Hi
I am doing the Dec06 paper and question 1.1 the electrician has purchased a car and i cannot see how they have worked out the answer.

They have done 25% x 16/12. I cannot see where they have got 12 months from as the car was purchased in the July and he started trading in the January.
Could anyone help please?

thank you

jahrmi

First set of accounts were produced 16 months after the start of the business 30 April. WDA is 25% for one year (12 months) for 16 months it's 25% X 16/12

cat12

hi,
So you can only do FYA for 12 months? so however long the accounting period is always divide it and x 12?

Thank you for your help

cat12

sorry i meant WDA is 25% not FYA!

sebastianforbes

i'm up for correction but...

fya's and iba's(new) are always flat rate allowances.

sla's, wda's, expensive cars and iba's(used) are always calculated per reporting period (ie. multiply by total number of months and divide by twelve).

cat12

thank you for your help.