mia 2004-09 - TAXATION Answer 1 (i) Computation of Tax...

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TAXATION Answer 1 ( i ) Computation of Tax Payable for Styles Sdn. Bhd. Year Assessment 2004 RM RM + - Profit before tax 20,186,100 Adjustments: Installment payment (Capital) 1,500,000 Equipment for disabled NIL Travelling, accommodation and sustenance (RM200 x 4 x 2) (d/d) 1,600 Wages and salaries: L. Passage – local (14,000 + 30,000 + 9,000) (d/d) 53,000 - overseas 107,000 Marketing: Product testing (d/d) 26,000 Embezzlement by manager 92,000 Embezzlement by cashier NIL Repairs: Replacement NIL Additional (within 2 yrs. Life span) 18,000 Maintenance and utilities: Provision (0.8% x 68 million) 554,000 Insurance premium (d/d) 40,000 Rental (2 x 6,000) 12,000 Research and development: M/Research (d/d) 120,000 Cash contribution (d/d) 90,000 Quality control NIL Payment of services (d/d) 280,000 Depreciation: Gain – lorry 5,800 Fine – driver 1,300 Loss – computer 2,400 Depreciation 256,000 Annual general meeting 150,000 Pre- operating (200, 000 ÷ 4) 50,000 Forex: Loss – equipment A 220,000 Gain – raw material 35,000 Gain – equipment B 75,000 Loss – raw material NIL Contribution: Public library (max 100,000) 110,000 Donation – app. institute 140,000 Donation – political party 130,000 1
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+ - Provision for bad-debts: B/D recovered – non trade 15,000 B/D written off – car loan 23,000 Specific provision – non trade 45,000 General provision 410,000 Other income: Interest 13,000 Rental 90,000 Dividend 56,000 22,506,800 2,400,400 (2,400,400) Adjusted business income 20,106,400 (+) Bal. Charge - lorry (see workings) - computer 22,000 24,000 46,000 (-) Cap. Allowance - building (see working) 50,700 - other assets 80,000 (130,700) Statutory business income 20,021,700 (+) B/F Business loss – Sec. 43 (2) (580,000) 19,423,700 Add: Other income: Sec. 4c: Interest - May bank 4,000 - Affin bank NIL : Dividend - Pioneer Exempt - Exim Bhd. (36,000 x 100) 72 50,000 Sec. 4d: Rental - Brunei Exempt Aggregate Income 19,495,700 Less: Donation - Approved donation (restricted to 5% of aggregate) (140,000) - Political party NQ Total/Chargeable Income 19,355,700 Tax @ 28% on 19,377,700 = 5,419,596 (-) Tax Credit on dividend (28% x 50,000) (14,000) Tax Payable 5,405,596 2
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(ii) Computation of Section 108 Account RM RM RM Opening balance 1/7/2003 400,000 (+) Tax paid during the year 1,200,000 (+) Tax credit on dividend received = (28% x 50,000) = 14,000 Or Tax on chargeable income = (28% x 20,727,700) = 5,803,756 take the lower 14,000 1,214,000 Compared Aggregate 1,614,000 (-) Compared Total Tax on dividend declared (28% x 576,000 ) 72 224,000 Sec. 108 balance 1,390,000 Working: Note: Factory: YA 2004 QBE (450,000 – 60,000) = RM390,000 IA 10% 39,000
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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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mia 2004-09 - TAXATION Answer 1 (i) Computation of Tax...

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