Prizes for whoever can answer this correctly!!!

Lolo Bean

There seems to be alot of confusing with this question and everyone I have spoke to so far agrees with me......lets see if you think differently.

£400 dividends received.

What is the Gross amount of these dividends???

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Now I know that dividends are received Net and therefore we need to Gross them up.

So I calculated 400/100*90 = £444.44 as the Gross amount. However this is incorrect.

What do you think?

Rinske

I just want to know what the prize is!

Jo Clark

Lolo Bean wrote: »

There seems to be alot of confusing with this question and everyone I have spoke to so far agrees with me......lets see if you think differently.

£400 dividends received.

What is the Gross amount of these dividends???

---

Now I know that dividends are received Net and therefore we need to Gross them up.

So I calculated 400/100*90 = £444.44 as the Gross amount. However this is incorrect.

What do you think?

Hello

Your calculation above equals £360 (400/100 = 4 * 90 = 360)

If you want to gross the dividend up, like you say above and in other posts, you need to take the amount received and multiply 100/90 - therefore £400 * 100/90 = £444.44 (mentioned above and in other posts)

If you take the £360 and gross that up you reach £400. £360 * 100/90 = £400

Could it be that the question was actually giving you the gross amount and asking what the tax credit was?
I think, but could be wrong as a few weeks ago now, that I had a question asking what the tax credit was. Perhaps this is AATs way of checking that we know it is 10%?

Happy to read what other people think.

Good luck with the exam


JC

Lolo Bean

Sorry yes I have typed my calculation out incorrecly. I worked out 400 x 100/90 = £444.44

The question definitley asked what the gross amount was of £400 dividends received.

I just dont understand.

wbauk2002

£440, Whats my prize?

uknitty

If the gross amount was £440 the net amount received would have been £396 which disagrees with the info given in the question

If the amount recieved was £400 that is 90% of the total. 400/90 *100 = £444 Gross (which is what the OP said

I agree with Jo Clark that there is probably something in the wording of the question that may put a different light on things. Can you type out the question in full please ?

Where is the question from and do you know the correct answer ? If you are doing a computer based test is it possible that your answer is not being accepted because of rounding ?

Lolo Bean

The exact question was:

£400 of dividends are received.
What is the gross amount of these dividends?
The available options from the dropdown menu were: 270, 350, 356.56, 360, 440, 444.44, 450 & 530

The question came up in my personal tax exam, however when I received my feedback sheet the question fell under the 'did not meet' section. The answer I gave was £444.44 (there was nothing mentioned in the question about rounding, it was asked as I have written it above).

I'm just not sure how you would go about calculating this question. Any advice would be appreciated.

King Cornflake

If the Dividends were received at "Net" value, which is usually the case in an exam, the gross value would have been £444.44.

Workings - £400 x (100/90) = £444.44 - or - £400 / 90 x 100 = £444.44 (whichever works best for you)

(Note: If the figure is to be used in a tax computation, round the figure up/down to the nearest '£' )

PGM

Lolo Bean wrote: »

The exact question was:

£400 of dividends are received.
What is the gross amount of these dividends?
The available options from the dropdown menu were: 270, 350, 356.56, 360, 440, 444.44, 450 & 530

The question came up in my personal tax exam, however when I received my feedback sheet the question fell under the 'did not meet' section. The answer I gave was £444.44 (there was nothing mentioned in the question about rounding, it was asked as I have written it above).

I'm just not sure how you would go about calculating this question. Any advice would be appreciated.

Then you'd choose the option 444.44.

The question makes more sense when you see the possible answers, otherwise you'd question whether the 400 is gross and why the answer isn't a nice round one.

coojee

PGM wrote: »

Then you'd choose the option 444.44.

The question makes more sense when you see the possible answers, otherwise you'd question whether the 400 is gross and why the answer isn't a nice round one.

Which Lolo Bean did and it was marked wrong, that's what's confusing everyone.

PGM

coojee wrote: »

Which Lolo Bean did and it was marked wrong, that's what's confusing everyone.

Now I'm confused and wishing I'd read the whole thread

Maybe it was marked wrong... ** but its electronically marked, who knows..

Louise89

I see two options;

1- There must have been at least one another question on that subject that you did not get right?
2- The computer did indeed mark it incorrectly!

MarkT

Louise89 wrote: »

I see two options;

1- There must have been at least one another question on that subject that you did not get right?

Having had to go over some results I and other class members have received recently on exams where we should have got a higher mark - this scenario has been given by the senior course tutor repeatedly

PGM

Louise89 wrote: »

I see two options;

1- There must have been at least one another question on that subject that you did not get right?
2- The computer did indeed mark it incorrectly!

Very good point Louise!

Louise89

PGM wrote: »

Very good point Louise!

Why thank you PGM!