During the year AKT traded very well given the economic conditions.

However some customers could not pay their invoices to AKT and one large customer offered to provide a second hand $5$ tonne truck as payment for the invoice. The amount owing on the invoice was $$15,500.$ The current market value of the truck was $$14,000.$

As the accountants to the company, you advised the company to make provisions in the financial statements for the following:

a$.$ Annual leave for the staff $$12,000$

b$.$ Bad and Doubtful debts $$18,000$

During the year the directors advised that only $$8,000$ of annual leave was paid and the actual debts considered to be bad and uncollectible was only $$7,200.$

Being the CEO of the company Akhtar believed that the company should acquire for his benefit a Telsa Model $3.$ The cost was $$223,000($including the COE$).$ The running costs for the care was $$15,000.$ The car was acquired on $9$ February $2024.$

Kat was happy to use public transport and Grab when she needed to get around Singapore.

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Issues they seek advice on: under Singapore tax

$1.$ How is the payment of the invoice of $$15,500$ treated when no cash was received? How is the difference between the $$15,500$ and the $$14,000$ treated?

$2.$ Explain how the two amounts of provisions are dealt with under the Income Tax Act and what amount if any is allowable as a deduction?

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$3.$ Explain whether the company can claim capital allowances on the motor car and claim the running costs as an expense

$4.$ Calculate the amount of income under s$10(1)($b$)$ for the motor vehicle benefit provided to Akhtar.