1. Hanwoos Store is a trading company which has been in operation for five years and makes up its accounts to 30 April annually. The details of Hanwoos existing non-current assets, including assets disposed of, and of new assets acquired in the year ended 30 April 2020 are shown in the report below:

Fixed assets report

Existing assets and assets disposed of during the year ended 30 April 2020

• Showroom and office administration area

Construction was completed on 12 December 2017 at a total cost of RM500,000. The costs relating to the office administration area are RM30,000.

• Air-conditioner

The air-conditioner was acquired on 3 October 2018 for RM900 and capital allowances were claimed as a small value asset in the year of acquisition.

The air-conditioner was damaged due to a fire and was written off on 25 February 2020.

• Inventory grading machine (general)

The machine was imported from Germany on 22 September 2018 for RM234,000 at the point of acquisition.

There was a subsequent realised foreign exchange loss of RM4,000 on the purchase price.

The machine was sold to a supplier for RM240,000 on 29 December 2019.

New assets acquired during the year ended 30 April 2020

• Renovation costs

RM35,000 was incurred on 11 February 2020 for an extension to the showroom. Included in these renovation costs was a racking system costing RM5,000 and the balance of the expenditure was for tiling, walls and doors and electrical installations.

• Motor car (non-commercial)

A second-hand motor car was acquired on 18 January 2020 for RM102,000, for the use of Hanwoos chief executive officer. The original cost of the car when new was RM165,000.

Required:

1. Compute the capital allowances claimable, if any, by Hanwoos on its existing assets for YA 2020 as well as the balancing charge or balancing allowance on the disposal/write off of the air-conditioner and the inventory grading machine.

[12 marks]

2. Compute the capital allowances claimable in respect of each of the new assets acquired by Hanwoos during YA 2020.

[8 marks]

3. Describe the following as defined by case law.
   1. Plant and machinery

[5 marks]

2. Industrial building

[5 marks]

Tax Questation