1. Janken Sdn Bhd (JANKEN) is a Malaysia resident company with a paid-up share capital of RM3.5 million and closes its accounts annually on 31 December. JANKEN's income statement for its financial year ended 31 December 2020 is as follows: Notes: Revenue Note RM'000 RM'000 922,000 (808,000) 114,000 Less: Cost of sales 1 Gross profit Add: Other income 2 500 114,500 Less Expenses Administration expenses 3 109,243 Selling and distribution expenses 4 386 (109,629) Profit before tax 1) Cost of sales includes the following: 4.871 Freight charges paid to Malaysian companies Staff Continuous Development programme expenses Note(2)(ii) Depreciation Allowance for inventory obsolescence RM'000 201 90 2,200 900 The allowance for inventory obsolesce is calculated as follows: Opening balance Add: Current year allowance Less: Inventory write off Closing balance RM'000 30 900 (470) 460