ABC Sdn Bhd is a Malaysian tax resident company incorporated in 2018 and makes up its first set of accounts to 31^st December 2018 .

During the year of assessment 2018, ABC Sdn Bhd commenced business and purchased the following items in December 2018 , all paid in cash/internal funds :

item	Cost (RM)	Remarks
Computer	8000	Bought second-hand from a local second-hand IT refurbishing shop . Purchase was supported by proper business invoices ,
Stand-alone fax machine	350	B ought new from local IT shop .
Motor vehicles-toyota hilux	108,000	Non-commercial vehicle Bought second-hand from a local second-hand car dealer .

Assumptions :

• All plant and machinery above are used for the business .
• ABC Sdn Bhd is the owner of all the above items as at 31^st December 2018
• ABC Sdn Bhd will attempt to maximize capital allowance claims where possible .

The rates of initial and annual allowances are as follows :

	Initial allowance	Annual allowance
Heavy machinery and motor vehicles	20%	20%
Plan and machinery	20%	14%
Information and communication technology equipment and software	20%	20%
Office equipment,furniture and fittings	20%	10%
Small value assets	-	100%

REQUIRED :

1. Compute the expected amount of Capital Allowance for the year of assessment 2018 .

Show all workings clearly . (4 marks)

2. Assuming ABC Sdn Bhd only commenced operations in YA 2019 (and not in YA 2018),how would this affect the initial allowance and annual allowance claim for YA 2018 and YA 2019 ?

Justify your answer .(calculations are not required) (3 marks)