Keevesen sdn bhd manufacturesbathroom accessories. The paid-up ordinary share capital is RMl million as at 11January 2020. The financial year is ended 31 December.

The following expenditurewas incurred during the financial (i) Heavy Machinery purchase ) 1 Jan 2020 Denosit RMl00,000 03 Jan 2020 Principal payment RM900,000 Interest payment RM200,000

(ii) General Machinery Cost Cost of leveling land for -Installation of machinery

RM 8,000

RM 2,000

(iii) Motorcar (2d hand Toyota ) for Manager ) Rlv[ 75,000

(iv) New Van (use for business) RM 125,000

Required: (a) Compute the capital allowances for the year of assessment 2020 for keevesen

(b) Describe the conditions to be eligible to claim capital allowances.

(c) Explain the following terms (i) Initial allowance vs annual allowance (ii) Balancing allowance vs balancing charge (iii)Capital allowance vs revenue allowance (iv)Ruling for 75% on industrial building (v) Ruling for 10% on machinery

Capital allowances

*

Qualifying expenditure (QE) for non-commercial vehicle is restricted to the * maximum amount below

	Non-commercial vehicle	Maximum OE rR MI
5.1	New vehicle purchased on or after 28 October 2000 where on-the-road orice is RM 150,000 or less	100,000.00
5.2	Vehicles other than the above	50.000.00