Page 420 - F1 Integrated Workbook STUDENT 2018

Chaptter 25

Exxampple 5

In the previouus examplees we havee used a coonstant ratte of tax to calculate the
tax payable, ee.g. 30%. HHowever, ssometimess the tax raate may cha ange durinng
the year and ttherefore taxable proofits will need to be prorated. Foor tax
pur rposes proffits are asssumed to bbe accruedd evenly.

Usiing the exxamples 1 to 4, recalculate thee tax if thee rates weere as
follows:
01/004/X0 – 311//03/X1 = 28%

01/004/X1 – 311/03/X2 = 330%
Sollution
Thee taxable pprofit for Zipppy was $444,300 for accounting period too 31/12/X1.

Taxx would be:

($444,300 × 3//12 × 28%) + ($44,3000 × 9/12 ×× 30%) = $$13,068.500
Thee taxable pprofit is pro-rated bassed on the amount of months thhat fall into
eacch of the taax rate periiods, i.e.
01/001/X1 – 311/03/X1 = 33 months aat the rate of 28%

01/004/X1 – 311/12/X1 = 99 months aat the rate of 30%

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