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# Business Tax FA2016 Assessment question

Just JoinedRegistered Posts: 21
Hi,

This question is from the AAT practice exam 2016 - Task 3

I managed to work out the salaries for Poppy, Paul & Pino but can't seem to be able to get the profit shares correct.

Thanks

• Just Joined Registered Posts: 21
• Registered Posts: 19
Hi,

From 1st April
Salary for Poopy > 5360
Salary for Paul > 3750
Total salaries paid = 9110

Profit year ended 31 March > 68600 / 12 = 5717 profit per month

Profit for the first period > 5717 x 3 = 17150
You then need to deduct the salaries already paid from the profit to share in the first period
17151-9110=8041
Then share the profit left as indicated:
Poopy 8041x40%= 3216
Paul 8041x60%= 4824

Same for the second period.

Total salaries paid > 43890
Profit for the second period > 68600/12x9 = 51445
Profit left for sharing > 51445 - 43890 = 7560
Poopy 7560 x 20% = 1512
Paul 7560 x 40% = 3024
Pino 7560 x 40% = 3024

If you add up all the salaries & profit paid it should give you the total profit for the year

5360 + 3750 + 3216 + 4824 + 43890 + 1512 + 3024 + 3024 = 68600
• Just Joined Registered Posts: 21
Many thanks Reme, makes perfect sense

I seem to be struggling with BTax FA2015 also (Task 3)

I have the tax years and basis periods correct but the profit incorrect. Can't find where I'm going wrong with this one??
• Registered Posts: 19

Many thanks Reme, makes perfect sense

I seem to be struggling with BTax FA2015 also (Task 3)

I have the tax years and basis periods correct but the profit incorrect. Can't find where I'm going wrong with this one??

@LouboutinLou1
You need to apportion each profit given accordingly to each period.

P/e 30 June 2014 > 50750
P/e 30 June 2015 > 106800
P/e 30 June 2016 > 77400

First year > 50750/7X4 = 29000
7 > these are the months which the first profit belongs to (1 Dec - 30 June)
4 > since the first year is only until March 2014, only 4 months will be considered.

Second year > 50750 + (106800/12X5) = 95250

Third year > 106800

In the second year is where the profit is being overlapped > 29000 from 1 Dec to 6 April which were already taken into consideration in the 1st year.
• Just Joined Registered Posts: 21
Many thanks Reme