CAPITAL ALLOWANCES

Chong Enterprise is in the business of mould fabrication and commenced business during the period ended 31 December 2016 and has been in business for 2 years. The details of the enterprise's fixed assets were as follows:-

1. During the current year ended 31 December 2016 Chong incurred / acquired the following assets:

RM

1. Office equipment 100,000
2. Motor vehicle 145,000
3. Lorry 160,000
4. Heavy machinery 10,000
5. Repairs capitalised 3,000

2. Assets acquired in January and February 2015:

1. Furniture & Fittings 1,000
2. Plant & machinery 100,000
3. Office equipment 20,000
4. Computers 10,000

During the year ended 31 December 2016, the following assets were stolen/destroyed:

1. The computers acquired during the year ended 31 December 2015 worth RM10,000 were stolen and the necessary police reports were made and the insurance claim received was RM7,000.
2. The furniture and fittings were destroyed by fire. However, Chong Enterprise was not eligible for any insurance claim.

Note: Assume that the provisions of Paragraph 71 of the Income Tax Act, 1967 are not applicable and therefore no claw back of capital allowances claimed for the assets destroyed / damaged will be made.

The adjusted income of Chong Enterprise for the year of assessment 2016 (before adjustments shown above) is RM1,000,000

Required

1. Compute the balancing charge (s) and / or balancing allowance (s) in respect of the assets destroyed / damaged. Note: The Residual Expenditure must be computed.

2. Compute the capital allowances for Chong Enterprise for the year of assessment 2016 in respect of:

1. Assets brought forward after taking into account the assets destroyed / damaged;

2. New assets acquired in 2016;

Compute the statutory income for Chong Enterprise for the year of assessment 2016.