Artmaster Sdn Bhd was incorporated on 1 April 2013.Its accounts are made up to 31 March annually.The company bought a piece of land for RM420,000 for the purpose of constructing a factory. The following expenses were incurred in the construction of the factory:

Date

Expenditure

Amount (RM)

1 April 2013

Legal fee (of which 7,000 related to acquisition of land)

15,000

1 May 2013

Architect's fees

25,000

12 May 2013

Payment to Local Authority for the approval of land

6,000

25 November 2013

Construction costs

520,000

30 November 2013

Cost of preparing and levelling land for the installation of plant and machinery*

220,000

15 January 2014

Wiring and plumbing

75,000

*The company purchased a heavy machinery on 28 November 2013 for RM120,000.

The building was completed on 12 February 2014 and subsequently the company commenced its business on 15 May 2014. The company used 1/11^th total area of the building as an office and the remainder as a factory.

The company acquired the following assets in year of assessment 2015:

Amount (RM)

Office equipment

15,000

Motor vehicles (non-commercial)

125,000

Van - used

95,000

There was no new asset acquired in the year of assessment 2016.

Required

(a)Determine the basis periods of Artmaster Sdn Bhd for the relevant years of assessment.

(3 marks)

(b)Advise Artmaster Sdn Bhd on the tax treatment for the capital expenditure on heavy machinery and the cost of levelling and for the installation of the machinery costing RM120,000 and RM220,000 respectively.

(5 marks)

(c)Prepare the computation of the industrial building allowance/ capital allowances for Artmaster Sdn Bhd for the relevant years of assessment using all information given. Show the residual expenditure of all assets as at the end of the basis period of the year of assessment 2016 clearly.

(17 marks)