Dream Sdn Bhd is a Malaysia resident company with a paid-up share capital of RM 4 million and closes its accounts annually on 31 December. Dreams income statement for its financial year ended 31 December 2018 is as follows:

Notes:

1) Loss from disposal of shares Shares held in Malaysian public listed company as an investment were sold at loss.

2) Advertising

Promotional samples incorporating companys name and logo: RM15,000

3) Donations

RM000

Donation of van to an orphanage 50

Sponsorship for local cultural approved by Ministry of Finance 10

Cash of gift to a politician organization 50

4) Entertainment Catering food and drinks for companys shareholders at Annual General Meeting

5) Salaries, EPF and Socso

The above expenditure includes:

i) Leave passage for management staff amounting RM112,000.

ii) Salary of disable clerk of RM 1,000 per month.

iii) Recruitment expenses of RM14,000 on employing new officers

6) Royalty payments Royalty payment to a French company made without deduction of withholding tax.

7) Halal certification

The company incurred RM13,000 for the purpose of obtaining halal certification which was issued during the year.

8) The company has unabsorbed capital allowances brought forward amounting 85,000

9) Unabsorbed business loss brought forward from previous year was RM 150,000

Required:

(i) Commencing with the profit before tax, compute the chargeable income and income tax payable of Dream Sdn Bhd for the year of assessment 2018.

Note: You should indicate by the use of the word nil any item referred to in the question for which no adjusting entry needs to be made in the tax computation.

Turnover Dividend income (single tier) Interest income Less: Cost of sales Less: Operating expenses Loss from disposal of shares Advertising Depreciation Donations Entertainment Freight charges Salaries, EPF and SOCSO Royalty payments Halal certification Net profit before tax Note 1 2 3 4 5 6 7 RM'000 15 26 17 15 464 110 36 184 2,660 100 13 RM'000 16,400 41 16,441 (2,330) 14,111 3.599 10,512 Turnover Dividend income (single tier) Interest income Less: Cost of sales Less: Operating expenses Loss from disposal of shares Advertising Depreciation Donations Entertainment Freight charges Salaries, EPF and SOCSO Royalty payments Halal certification Net profit before tax Note 1 2 3 4 5 6 7 RM'000 15 26 17 15 464 110 36 184 2,660 100 13 RM'000 16,400 41 16,441 (2,330) 14,111 3.599 10,512