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CIMAPRA19-F01-1 Exam - Topic 1 Question 104 Discussion

The accounting profit before tax of an entity was $243,200 for the year ended 31 July 20X4.The accounting profit included disallowable income from government grants of $48,000 and disallowable expenditure of $25,600 on entertaining expenses.The entity also paid a $40,000 dividend to shareholders. The tax rates for the country were as follows:Calculate the tax the entity is due to pay for the year ending 31 July 20X4.
B) $39,174
A) $47,840
C) $57,546
D) $44,160

CIMAPRA19-F01-1 Exam - Topic 1 Question 104 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam
Question #: 104
Topic #: 1
[All CIMAPRA19-F01-1 Questions]

The accounting profit before tax of an entity was $243,200 for the year ended 31 July 20X4.

The accounting profit included disallowable income from government grants of $48,000 and disallowable expenditure of $25,600 on entertaining expenses.

The entity also paid a $40,000 dividend to shareholders. The tax rates for the country were as follows:

Calculate the tax the entity is due to pay for the year ending 31 July 20X4.

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Suggested Answer: B

by Laurel at Dec 04, 2024, 03:06 PM

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Goldie
8 months ago
Totally agree, option D seems right!
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Cherelle
8 months ago
Wait, how does the dividend affect the tax calculation?
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Leatha
8 months ago
I'm leaning towards option D, $44,160.
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Ronnie
8 months ago
Don't forget the disallowable income and expenses!
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Willie
9 months ago
The accounting profit was $243,200 before tax.
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Thaddeus
9 months ago
I’m pretty sure we just need to focus on the adjusted profit before tax to find the tax due, but I can’t recall the exact steps to take.
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Elvis
9 months ago
I feel like I’ve seen something similar in our revision notes, where we adjusted profits for tax purposes. I think we need to calculate the effective tax rate too.
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Glory
9 months ago
I think we need to subtract the disallowable expenses from the accounting profit, but I’m a bit confused about how the dividend plays into the tax calculation.
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Starr
9 months ago
I remember we had a practice question about adjusting profits for tax calculations, but I’m not sure how the disallowable income affects the taxable profit here.
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Emily
9 months ago
I'm a bit confused about how to handle the dividend payment. Does that affect the tax calculation in any way? I'll need to double-check the instructions to make sure I'm not missing anything important.
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Felix
9 months ago
This looks straightforward enough. I'll just need to be careful to apply the correct tax rates to the different components of the taxable profit. As long as I don't make any silly mistakes in the calculations, I should be able to get the right answer.
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Osvaldo
9 months ago
Okay, I think I've got this. First, I'll add the disallowable income of $48,000 and the disallowable expenditure of $25,600 to the accounting profit of $243,200 to get the taxable profit. Then I'll apply the tax rates to calculate the tax due.
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Marg
9 months ago
Hmm, I'm a bit unsure about how to handle the disallowable income and expenditure. Do I need to add them back to the accounting profit or subtract them? And what's the deal with the dividend payment?
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Melina
10 months ago
This looks like a straightforward tax calculation question. I'll need to adjust the accounting profit for the disallowable items and then apply the tax rates to calculate the tax due.
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Maryann
1 year ago
Alright, time to put on my accountant hat and get to work. This is going to be a piece of cake... or is it?
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German
1 year ago
I hope I don't end up like the government, trying to figure out how to tax the entertaining expenses. That must be a tough job!
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Danica
1 year ago
User 4: I agree with Danica, $44,160 sounds right.
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Merilyn
1 year ago
User 3: I'm going with $44,160.
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Tricia
1 year ago
User 2: No, I believe it is $39,174.
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Evangelina
1 year ago
User 1: I think the tax due to pay is $47,840.
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Tuyet
1 year ago
Okay, let's see. Disallowable income, disallowable expenses, and the tax rates - this is going to require some calculations.
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Elden
1 year ago
C) $57,546
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Rolland
1 year ago
B) $39,174
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Kindra
1 year ago
A) $47,840
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Caprice
1 year ago
I see your point, but I still believe it's $47,840 because of the disallowable income and expenditure.
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Levi
1 year ago
I disagree, I calculated it to be $39,174.
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Yesenia
1 year ago
Hmm, this looks tricky. I'll have to carefully go through the information provided to figure out the correct tax amount.
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Margot
1 year ago
User2: Yes, we have to consider the disallowable income and expenditure to get the correct tax amount.
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Dulce
1 year ago
User1: I think we need to calculate the tax based on the given information.
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Caprice
1 year ago
I think the tax due to pay is $47,840.
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