1.Lily is a sole trader who prepares accounts to 5 April each year using the cash basis of accounting. Her results for the period of account to 5 April 2020 show the following:
The figure for invoice sales includes an invoice for £1,500 which was paid on 10 April 2020. In addition to the cash expenses of £20,200, Lily incurred motoring expenses of £2,800 for driving 8,000 miles of which 6,500 miles were for business purposes. Lily wishes to use approved mileage allowances for motoring.
What is Lily's taxable trading income for the tax year 2019/20?
2.Joe has been in business for many years preparing accounts to 5 April each year. The tax written down value of his main pool at 6 April 2019 was £12,000. Joe sold machinery on 10 June 2019 for £11,900 which had originally cost £11,600. He made no acquisitions during the year ended 5 April 2020.
What is the maximum capital allowance that Joe can claim for the period of account to 5 April 2020?