Income Statement Case Study Example | Topics and Well Written Essays - 1000 words

Income Statement - Case Study Example ' Repairs to flat 420 Repairs to shop floor 575 Cash register repairs 125 Re-painting of exterior of property 2,240 Replacement weighing scales 75 Sundry allowable items 2,100 Total 5,535 9. Sundry expenses ' Tea, coffee and milk for staff 78 Telephone, postage and stationery 284 Calendars for customers @ %2.80 each 560 Window cleaning 500 Cleaning expenses 600 Donation to local Playgroup 250 Sundry small expenses 130 Total 2,402 10. Depreciation Depreciation is calculated on a straight-line basis over 4 years for motor vehicles and equipment. Additional information: 1. Capital allowances The written down values for capital allowance purposes at 6 April 2008 were as follows: ' Motor car (Vauxhall Astra) Private use agreed as 25% 10,500 General Pool 7,200 2. Additions and disposals - fixed assets ' Addition 21 May 2008 Computer equipment 3,200 Disposal 1 July 2008 Computer equipment proceeds (original cost '2,100) 300 3. Goods for own use Ted estimates that fruit and vegetables with a retail price of '10 (cost price '3.50), are taken for the family's use each week. No provision has been made in the accounts. Task 1 Prepare a trading profit computation for Ted's business for the year ended 5 April 2009. Task 2 Net property rental income from the flat has been agreed with HMRC as '4,800 for 2008/2009. Lora received dividends of '2700 for the year 2008/2009 Prepare income tax computations for Ted and Lora, showing Income Tax liabilities and Income Tax payable. Task 3 Ted and Lora are not expecting to pay income tax this year as the Income Statement shows a loss. Write a letter to Ted explaining why you have disallowed each of the Income Statement items in the trading profit computation for income tax purposes, the amount of Income... Write a letter to Ted explaining why you have disallowed each of the Income Statement items in the trading profit computation for income tax purposes, the amount of Income tax payable and the dates due, making any reasonable assumptions you wish. Assuming that Ted goes ahead with his plans to expand the business to include a juice and smoothie bar, prepare a trading profit computation for the new business, for a full year of trading based on the projected results for the year to 5 April 2009 given above, (use 2008/9 tax rates and allowances).