TAXXQ5 - TAXATION 12June2007 From10.00amto12.00noon...

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TAXATION Diploma stage examination 12 June 2007 From 10.00am to 12.00noon plus ten minutes reading time from 9.50am to 10.00am Instructions to candidates There are  four  questions on this question paper Answer  three  questions in total One  compulsory question from  Section A Two  of the three questions from  Section B The question in Section A carries  40  marks The questions in Section B carry each carry a total of  30  marks All workings should be shown.  Where calculations are required using formulae, calculators may be   used but steps in the workings must be shown.  Calculations with no evidence of this (for example,   using the scientific functions of calculators) will receive no credit.  Programmable calculators are not   permitted in the examinations room. Formula sheets, Proforma booklets, statistical tables, graph paper and cash analysis paper are   available from the invigilator, where applicable. Where a question asks for a specific format or style, such as a letter, report or layout of accounts,   marks will be awarded for presentation and written communication. (Copyright)
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Diploma June 2007 Taxation  SECTION A (Compulsory) (a) Acme Ltd has the following results for the 15 months to 31 March 2007: £ Adjusted trading profits before deduction of capital allowances (note 1) 727,000 Income from property (note 2) 42,000 Gross Interest received on Government Securities (note 3) 30,000 Bank Deposit Interest:     Received to 31 December 2006 7,450     Accrued to 31 March 2007 3,100 Capital Gains:     Disposal on 30 November 2006 2,500     Disposal on 10 March 2007 4,000 Gift Aid Donation (note 4) 30,000 Notes 1. The written down value (WDV) of Acme’s plant and machinery at 1 January 2006 was  £227,000. Acme, which was a medium-sized company throughout 2006 and 2007, made  a purchase of plant of £50,000 on 1 February 2007. 2. The property was let on 1 July 2006 under a 10 year lease agreement for a rental of  £32,000, payable annually in advance. The figure shown above was received on 1 July  2006, and includes a one-off premium of £10,000. 3. The Government  securities were purchased on 1 July 2006. Interest of £30,000 is  payable on 30 June and 31 December each year. 4. The Gift Aid donation comprises two gifts: £20,000 given on 31 December 2006 and  £10,000 given on 31 March 2007. 5. Acme has a chargeable loss brought forward at 1 January 2006 of £3,750. 6. In the year to 31 December 2005, Acme incurred a trading loss of £140,000 which was  carried forward under s393(1) of ICTA 1988.
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