BBFT2013 TAXATION Question 4 Allan, Bryan and Catty are partners in a partnership engaging in a food catering business. The terms of the partnership agreement until 30 September 2020 were as follows: Allan Bryan Catty RM RM RM Capital contribution 105,000 90,000 75,000 Salary per annum 72,000 60,000 54,000 Interest on capital per annum 5% 5% 5% Partners' private expenses 10,000 9,000 7,000 On 30 September 2020, Bryan withdrew as a partner. Upon the withdrawal of Bryan, the interest on capital for Allan and Catty was revised to 4% per year with the other terms remaining the same. The profit or loss is shared equally among the partners throughout the whole year. The provisional adjusted income for the year ended 31 December 2020 was RM280,926. The capital allowance on the plant and machinery was RM4,000. The partnership made a cash donation of RM6,000 to an approved institution on 30 June 2020. Required: (a) Compute the divisible income for the partnership and the total income of the partners for the year of assessment 2020. (17 marks) (b) Explain the tax treatment for the cash donation of RM6,000 made by the partnership.(3 marks) [Total: 20 marks]