A. AAB Sdn Bhd, a new manufacturing company located in Nilai Industrial Park. The management of the company is still undecided on the business commencement date and year-end to close its account. The management of AAB Sdn Bhd is now considering the following options of accounting periods:

i. 1 April 2021 to 31 December 2021;

ii. 1 April 2021 to 31 March 2022; or

iii. 1 April 2021 to 31 March 2023.

Required:

i. Advice AAB Sdn Bhd on how to determine the first basis period and year of assessment for the options as above.

ii. Explain why the commencement date is very crucial to be determined by the company.

B. Meka Bhd commenced a servicing business on 1 September 2016 and prepared its first set of accounts to 31 December 2016 and to that date for subsequent years. On February 2018, Meka Bhd has undergone a major change in the company structure. Therefore, the company changes its accounting year-end to 30 June.

The adjusted income of the company’s business is as follows:

Accounting date Adjusted income

RM

1.9.2016 - 31.12.2016 160,000

1.1.2017 – 31.12.2017 400,000

1.1.2018 – 30.6.2019 610,000

1.7.2019 – 30.6.2020 98,400

Required:

Determine the basis period and adjusted income of Meka Bhd for the relevant years of assessment.

2

C. Cashless Sdn Bhd incurred the following expenses for the year ended 30 November 2020:

i. Compensation to competitors to restrict competition on the business area

ii. Penalty of RM10,000 on late payment of company tax

iii. Staff annual dinner at Hilton Hotel costing RM100,000 for its employees.

iv. Cash donation of RM50,000 to the Covid-19 Fund.

v. Industrial training allowance to two undergraduate IUKL students amounting to RM1,000 per month.

Required:

Explain with reason, whether each of the above expenses is tax deductible or not in arriving at the adjusted income of Cashless Sdn Bhd.