07-09 - T AX MIA QE / SEPT 2007 ANSWER 1 (a) Computation of...

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TAX MIA QE / SEPT 2007 1 CONFIDENTIAL ANSWER 1 (a) Computation of Tax Payable Orio Sdn. Bhd – YA 2007 Sec. 4a: RM RM + - Profit before taxation Adjustments: 638,510 Sale of furniture 48,000 Dividend - Malaysia 146,000 Hong Kong 26,000 Interest - Fixed 29,500 Singapore 10,500 Compensation NIL EPF 253,720 – (19% x 932,000) 76,640 Salary – handicapped (1,900 x 7 x 2) double deduction 26,600 Leave passage 20,000 Export credit (double deduction) 27,800 Insurance premium (double deduction) 21,200 Interest on loan 26,400 Research (double deduction) 35,000 Bad debts – specific prov. Nil general prov. (5,200) write off 23,200 18,000 Entertainment: - overseas (50% x 44,950) 22,475 - staff annual dinner NIL - local customers (50% x 28,600) 14,300 Donation - Old folks home 22,340 Computers 24,000 Entrance fees - association 2,700 Entrance fees 8,000 Public library (restricted to RM 100,000) 70,000 National Interest project 80,000 Professional fees - new tenancy 13,900 - violation of Co. Act provision 14,000 - tax appeal 12,100 - accountancy and audit fees NIL Miscellaneous fees NIL Depreciation 85,000 Proposed dividend 124,600 Goodwill written off 26,500 1,299,465 370,600 (370,600) Adjusted income 928,865
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TAX MIA QE / SEPT 2007 2 CONFIDENTIAL (+) Balancing Charge 12,040 (-) Capital allowance (110,000) Statutory income 679,805 (-) Loss b/f sec 43(2) (80,000) 750,905 (+) Other income Dividend (146,000 x 100) - 26400 173,600 73 Exempt dividend Nil Interest from fixed deposit 29,500 Interest – Singapore (exempt) Nil Aggregate income 954,005 (-) Approved donation (Subject to 7% of Aggregate Income) = 66,708 Cash donation = 22,340 National Interest RM80,000 restricted to: [66,708 – 22,340] = 44,440 (66,708) In kind (not allowable) NIL Chargeable Income 887,298 Tax on the 1 st 500,000 @ 20% = RM100,000 Tax on the balance 387,277 @ 27% = 104,570 204,570 (-) Tax Credit – Sec 110 (27% x 200,000) (54,000) Tax Payable 150,570 (20 marks) Working YA 2005 (year ended 30/9/05) RM 10/4/05 QPE (furniture) 30,100 IA 20% (6,020) CA AA 10% (3,010) 9,030 RE 21,070 CA YA 2006 (year ended 30/9/06) AA 20% (3,010) 3,010 RE 18,060 YA 2007 (year ended 30/9/07)
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TAX MIA QE / SEPT 2007 3 CONFIDENTIAL 15/4/07 Sale Proceeds (48,000) Balancing charge 29,940 (Note : Balancing charge is restricted to total capital allowances claimed that is RM12,040). (b) Wira Sdn Bhd Processing Machine YA 2004 (year ended 30/9/04) RM QPE (20/3/2003) 400,000 IA 20% (80,000) CA AA 14% (56,000) 136,00 0 RE 264,000 CA YA 2005 (year ended 30/9/05) AA 14% 56,000) 56,000 RE 208,000 YA 2006 (year ended 30/9/06) 22/4/06 sold to ERA (208,000) (Ignore Sale Value because there is a controlled transfer) Balancing Adjustment NIL Serah Sdn Bhd YA 2006 (year ended 30/9/06) RM RE 208,000 IA NIL CA AA (14% x 400,000) (56,000) 56,000 RE 152,000 YA 2007 (year ended 30/9/07) July 2007 S. Proceed (600,000) Balancing charge 448,000 Taxable balancing charge is restricted to total capital allowance claimed i.e. RM248,000
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This note was uploaded on 11/10/2010 for the course UM ceaa1122 taught by Professor Sam during the Spring '10 term at Calumet College.

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07-09 - T AX MIA QE / SEPT 2007 ANSWER 1 (a) Computation of...

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