unit 18: BTC Kaplan

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*Jo
*Jo Registered Posts: 509 Epic contributor 🐘
Hi, im doing the key techniques questions from the kaplan 2010 workbook.

Activity 3 deducts expenditure of office furniture as a disallowable expense when adjusting trading profits for tax. Is this because office furniture would be classed as capital expenditure? Im a little confused and hoping someone will be able to clarify for me.

Thanks in advance.

Jo

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  • timgriff
    timgriff Registered Posts: 55 Regular contributor ⭐
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    Yes, I believe so as the expenditure is on a fixed asset you would add it back for adjusted trading profits. You would also add back any depreciation. Then when it comes to capital allowances you would claim the full amount under AIA (up to £50k) on the addition as it's plant and machinery. If AIA is used up then WDA at 20% would apply. So in a nutshell it's added and then taken away, confusing isn't it?!.... I think I've got that right, please correct me anyone if I haven't...
  • *Jo
    *Jo Registered Posts: 509 Epic contributor 🐘
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    Thanks Tim, thats what I thought. Your right it is confussing but hey makes life interesting daint it. :)
  • timgriff
    timgriff Registered Posts: 55 Regular contributor ⭐
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    no probs! I'm also working my way through that book at the moment as well as the Osborne one (both pretty similar). This has to be the most difficult unit surely... i'd rather watch the grass grow than do this unit! :D
  • *Jo
    *Jo Registered Posts: 509 Epic contributor 🐘
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    I dont think its the most difficult yet, that for me so far has to be Unit 15 as I hate ratio analysis with a passion! (im no good with putting things into words others can understand).

    I quite enjoy Business Tax actually, sad maybe but its easier to think of real life situations that you can apply to it.

    Do you think its worth getting the osbourne book as well? Im distance learning with Kaplan so I have all their stuff already. Im also planning on doing PTC in June but havent started studying for that just yet.
  • AK002
    AK002 Registered Posts: 2,492 Beyond epic contributor 🧙‍♂️
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    What ive always wondered is do they just put that question in to test you (charge cap ex to the p+l) 'cause surely any semi-decent accountant would have capatlised it as expected instead?
  • timgriff
    timgriff Registered Posts: 55 Regular contributor ⭐
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    oh yeah i forgot about the dreaded unit 15!! I'm doing MAC as well as BTC at the mo so my minds in meltdown..i see ratios and numbers everywhere, a bit like the matrix! Planning to do my PTC for december alongside DFS.

    The osbourne book I find is bit more logical and less dense as kaplan seem to draw things out a lot and they seem to go into minute detail of some things and then skate over some of the important stuff. But kaplan can be good at explaining calculations too. Maybe give it a go if your struggling, and then sell it afterwards perhaps...

    Edited to add, AK002: I see what you mean, by capitalising you charge it to the balance sheet not the P&L so no need to add back.
  • *Jo
    *Jo Registered Posts: 509 Epic contributor 🐘
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    timgriff wrote: »
    oh yeah i forgot about the dreaded unit 15!! I'm doing MAC as well as BTC at the mo so my minds in meltdown..i see ratios and numbers everywhere, a bit like the matrix! Planning to do my PTC for december alongside DFS.

    The osbourne book I find is bit more logical and less dense as kaplan seem to draw things out a lot and they seem to go into minute detail of some things and then skate over some of the important stuff. But kaplan can be good at explaining calculations too. Maybe give it a go if your struggling, and then sell it afterwards perhaps...

    Edited to add, AK002: I see what you mean, by capitalising you charge it to the balance sheet not the P&L so no need to add back.

    i did mac in dec last year, took me the whole 3 hours plus but thats cos i made a silly mistake on one question and couldnt balance it. left it went back and finished in the end and then passed :) im leaving dfs till december as i work in industry so financial accounting is harder for me to grasp. ECR was a breeze compared to FRA. 1 exam and unit 10 should be too difficult hopefully *gulp*
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