a btc q - need quick explanation regarding the overlap profit dates in this example!
lisnic
Registered Posts: 141 Dedicated contributor 🦉
The activity is:
Harriet starts trading on 1 Mar 07 and has the following results:
Period Profit
1.3.07-30.6.08 32,000
1.7.08-30.6.09 36,800
Show taxable profits for the first 4 tax years and any overlap profits that arise.
Solution is:
Yr Period Workings Taxable Profits
06/07 1.3.07-5.4.07 32,000 x 1/16 2000
07/08 6.4.07-5.4.08 32,000 x 12/16 24000
08/09 31.5.07-30.6.08 32,000 x 12/16 24000
09/10 1.7.08-30.6.09 36800
Ok i got all that bit which was great but then i went to work out overlap profits
The solution has overlap profits as
1.7.07 - 5.4.08 32,000 x 9/16 18000
I had 31.5.07 - 5.4.08 however
Please can someone explain why it is the 1.7.07 and not 31.5.07 as when i look at dates the only dates i can see to be overlapping are the 31.5.07 (in 07/08 and 08/09) up to 5.4.08 (again in 07/08 and 08/09)
Thanks
Harriet starts trading on 1 Mar 07 and has the following results:
Period Profit
1.3.07-30.6.08 32,000
1.7.08-30.6.09 36,800
Show taxable profits for the first 4 tax years and any overlap profits that arise.
Solution is:
Yr Period Workings Taxable Profits
06/07 1.3.07-5.4.07 32,000 x 1/16 2000
07/08 6.4.07-5.4.08 32,000 x 12/16 24000
08/09 31.5.07-30.6.08 32,000 x 12/16 24000
09/10 1.7.08-30.6.09 36800
Ok i got all that bit which was great but then i went to work out overlap profits
The solution has overlap profits as
1.7.07 - 5.4.08 32,000 x 9/16 18000
I had 31.5.07 - 5.4.08 however
Please can someone explain why it is the 1.7.07 and not 31.5.07 as when i look at dates the only dates i can see to be overlapping are the 31.5.07 (in 07/08 and 08/09) up to 5.4.08 (again in 07/08 and 08/09)
Thanks
0
Comments
-
Hi
Your overlap occurs in the financial year 07/08 & 08/09
Your 07/08, 06/04/07-05/04/08 (12/16 x 32000) = 24000
Your 08/09, 01/07/07 - 30/06/08
The 01/07/07 is four months into the 07/08 period.
Your 08/09 finishes on the 30/06/08 - 3 months after the 07/08 period finishes.
Therefore your overlap profit is
01/07/07 - 05/04/08 = 9/16 x 32000 = 18000
Hope this helps - its quite tricky to explain!!!
Gemma0 -
no still dont get it sorry
i understand that those are the 2 years that the overlaps are in but still cant see why its july and not the date i put?
The bpp text has about 3 lines describing what it is and its not very clear0 -
anyone else help with this as still dont get it ?! sorry0
-
If you write out your 07/08 months:
April May June July August September October November December January February March
08/09 :- July Aug Sept Oct Nov Dec Jan Feb March April May June July
Your o8/09 starts at July which is in the 07/08 year, your last month in the 07/08 year is March, 08/09 carries on to July.
So the overlap is from July - March?!
Hope this helps - finding it difficult to explain!!!
Gemma0 -
thanks ill look at this again in the morning
im prob just having a brain dead moment thanks!
xx0 -
we all have them!!
infact im having one right now - but best to have them now and not in the exam eh!!!!
xxx0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 319 NEW! Qualifications 2022
- 157 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 92 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 274 Tax
- 136 Bookkeeping
- 7.2K General accounting discussion
- 201 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership