1. MamakMaju Sdn Bhd is a manufacturing company and closes its accounts annually on 31 December. The company acquired a factory building for RM1,300,000 during the year of assessment 2018.

In 2019, the company extended the factory building and incurred the following capital expenditure:

RM

Levelling of land 10,000 Design fee for factory 17,000

Construction cost for factory extension 113,000

140,000

Required:

Determine the qualifying building expenditure and calculate the industrial building allowance for the years of assessment 2018 and 2019.

(11 marks)

2. Discuss the tax treatment on the income received and the expenditure incurred for each situation below:
   1. Donalds Restaurant, which closes its accounts on 31 December each year, lost RM40,000 in the year 2016 due to embezzlement by three of its cashiers. The company made an insurance claim for the loss of cash on 29.12.2016. Finally, in 15.12.2017, the insurance company agreed to pay the full amount to the restaurant. Donalds Restaurant received the cheque payment on 30.12.018.

2. Raymond treats his client, Suraya and her assistant for lunch while discussing for his companys next production dealing with Surayas company.

3. Aladdin Sdn Bhd gives free samples of its candles to guests at the launch of its new therapeutic candles.

4. Sin & Sun Sdn Bhd incurred provision of vintage tea set as wedding gift to its regular customer.

5. Neon Sdn Bhd is a furniture manufacturing company and has incurred legal fees of RM5,000 for the transfer of a mortgage on business premises and legal fees of RM3,000 for claims for compensation for trading goods lost in transit.

(14 marks)

Total: 25 marks