08-03 - TAX MIA QE/MAC 2008 ANSWER 1 (a) Computation of Tax...

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TAX MIA QE/MAC 2008 1 CONFIDENTIAL ANSWER 1 (a) Computation of Tax Liability for TENT Bhd YA 2007 RM RM + - Sec 4(a) : Business Net profit before tax 3,370,000 Cost of sales: Toys - donation 42,000 Other income 40,000 Remuneration: Entertainment (50%) 175,000 EPF 35,500 – (19% x 350,000 x 50%) 2,250 Bungalow – Pangkor Laut NIL Professional fees: New trademark 5,500 Legal fees NIL Non-trade collection 1,700 Accounting and auditing NIL Income tax appeal 9,000 Feasibility study 4,000 Entertainment Suppliers (50% x 40,000) 20,000 Staff lunches NIL Promotional gifts NIL Subsidy NIL Doubtful debts: 10,000 Lease rental: WPL 565 (72,000 – 50,000) 22,000 WPJ 351 (46,000 – 50,000) NIL BHD 8805 (68,000 – 50,000) 18,000 Repairs and maintenance: Glass door NIL Component parts NIL Cleaning NIL Computers 48,000 Foreign exchange: Realised gain 40,000 Unrealised gain 55,000 Fines: EPF interest 13,600 Fines – sales tax 4,400 Donations: Wheel chair NIL Cultural show NIL USM (124,000 – 100,000) 24,000 Painting 65,000 Cash 110,500 Depreciation 110,000 ___ 4044,950 145,000
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TAX MIA QE/MAC 2008 2 CONFIDENTIAL (145,000) Adjusted Income 3,899,950 (+) Balancing charge 27,000 (-) Capital allowance (136,700) (-) Balancing allowance (16,000) Statutory Income 3,774,250 (-) Business loss b/f – Sec 43(2) (17,800) 3,756,450 (+) Other Income: Rental (exempt) NIL Aggregate Income 3,756,450 (-) Approved donation: Painting (65,000) Cash (subject to 7% restriction) (110,500) Total/Chargeable Income 3,580,950 Tax payable @ 27% x 3,580,950 = RM966,856.5 (14 marks) (b) (i) Yes, it is a deductible expense to Jully Sdn. Bhd. because for a company with an authorised capital of not more than RM2.5 million, the incorporation expense is allowed to be deducted against its business income. [Income Tax (Deduction of Incorporation Expenses) Rules 2003, P.U.(A) 475/2003] (1 mark) (ii) Commencement of a new company For a new company commencing business in a year of assessment, Jully Sdn. Bhd is required to furnish its tax estimate, within 3 months from the date of commencement. (i.e latest by 31 March 2007) (2 marks) (c) The compensation received is taxable because it is a revenue receipt. Points to be considered: 1. Hartanah Sdn. Bhd. is a property developer and such land would be stock-in- trade. 2. The company had the intention to develop the land into a residential area and derive income from the sale of houses, i.e trading. 3.
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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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08-03 - TAX MIA QE/MAC 2008 ANSWER 1 (a) Computation of Tax...

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