Answer a, b and c.

7. Assumed that the following items were detected/discovered during your preparation of the tax computation. Explain the implication of the items below and suggest the tax treatment you would adopt in addressing the issues. a) Few invoices were falsified and included as operating business expenses in the business account. b) You found an item totalling RM48,000 treated as miscellaneous expenses. You seek clarification from the tax payer and was told that from 1 July 2020, he was appointed as a part-time consultant to a company and received a total of RM48,000 for the period of 1 July 2020 to 31 December 2020. However, he did not declare it as income as he argued that it is not related to his business. Instead he treated it as miscellaneous expenses, a replacement cost for the time he spent on consulting and not attending to his own business (treated as expense for time spent/lost). c) The taxpayer remitted RM100,000 from Singapore on 15 December 2020. The income was generated from the sale of trade products for the whole year. The taxpayer did not declare the amount, since he argued that it is a foreign sourced income, therefore exempted from Malaysian income tax. d) The taxpayer together with his friend Sawadee own 2 printing shops, in Terengganu and in Bangkok, Thailand. On 1 July 2020, the taxpayer brought into his current business, a used machine from overseas business. He claims both initial and annual allowance for that machine for YA2020. e) The taxpayer purchased 2 shop lots where he intended to sublet to potential tenants. On 1 July 2020, he managed to find 2 tenants and they both agree to pay RM2,400 per month for each shop lot. The tenancy contract which is for three years begun on 1 August 2020. The tax payer has no intention to declare the income. f) A van registered under the tax payer's name is used in his business. And the tax payer claim capital allowances on the van. g) The tax payer withdrew some goods from the business for his personal consumption. No record was made as the tax payer claimed that since he owns the business, he was told by a friend that he is allowed to do that twice every month