Company taxation- Exercise Revision.docx - Company taxation Exercise Happy World Sdn Bhd has been in business of manufacturing toys since 2009.The

Company taxation- Exercise Revision.docx - Company taxation...

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Company taxation- Exercise Happy World Sdn Bhd has been in business of manufacturing toys since 2009.The company’s paid up capital as at 1 July 2017 is RM3 million. The following is the Profit and Loss Account for the year ended 30 June 2018 for its business: Notes RM RM Sales 1,900, 000 Less: Cost of Sales 1 (300, 000) Gross Profit Less: Expenses: 1,600, 000 Bad and doubtful debts 2 70, 000 Interest expenses 3 22,000 Legal and professional fees 4 38, 750 Marketing expenses 5 37, 500 Miscellaneous expenses 6 16, 000 Salaries and wages 7 142, 000 Lease rental 8 70, 000 (396,250) 1,203, 750 Add: Gain on disposal of shares from oversea company 30,000 Interest income from a loan made to an oversea company 50,000 80, 000 Net profit before taxation Notes: 1. The cost of sales includes the following: 1,283, 750 RM Export credit insurance premium paid to a locally incorporated insurance company 101,000 Provision for stock obsolescence 15,000 Depreciation 2,000 Damaged stock written off 8,000
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2. Provision for doubtful debts are as follows: RM Non- trade debtors 6, 000 Trade debtors (General) 22, 000 Trade debtors (Specific) 2, 000 Bad debts written off 50, 000 Recovery of bad debts written off (10, 000) 70,000 3. Interest expenses is paid on a loan borrowed from a Malaysian bank of RM1,000,000. The company used 60% amount to fund advanced to oversea company and received interest as return, and the balance is to finance its own business operation. 4. Legal and professional fees comprise: RM Fees paid for payroll processing services 5, 500 Tax filling fees 12, 000 Tax appeal fees 11, 230 Fees paid to an approved research institute 3, 520 Legal fees on the acquisition of new business 6, 500 5. Marketing expenses comprise: 38, 750 RM
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