Question
Puan Marini is the sole proprietor of Smart Enterprise, a business which involves in trading of women shoes. The business has been operating since 2010
Puan Marini is the sole proprietor of Smart Enterprise, a business which involves in trading of women shoes. The business has been operating since 2010 and closes its account annually to 31 December. The income statement of Smart Enterprise for the year ended 31 December 2015 is as follows:
SMART ENTERPRISE
Income Statement
For the year ended 31 December 2015
| Notes |
| RM |
| RM |
Sales Less: Cost of sales Opening stocks Purchases |
1
|
|
120,000 650,000 |
| 980,000
|
|
|
| 770,000 |
|
|
(-) Closing stocks |
|
| 208,000 |
| 562,000 |
Gross Profit |
|
|
|
| 418,000 |
Add Other Income: Interest income Dividend (single tier) |
2 3 |
|
|
|
35,000 25,000 |
|
|
|
|
| 478,000 |
Less: Expenditure:
Advertisement Utilities expenses Marketing expenses Lease rental Salaries and allowance Donations Approved EPF Entertainments expenses Travelling expenses Sundry expenses Office maintenance expenses Repair expenses Provision for doubtful debt Loss on disposal of office equipment |
4
5 6 7
8 9 10 11 12 13
|
|
13,400 23,700 15,000 17,400 145,000 8,500 47,170 48,400 28,900 35,750 17,340 8,100 6,450 1,250 |
|
416,360 |
Profit before tax |
|
|
|
|
61,640 |
Notes:
1. Cost of sales
The cost of sales includes depreciation of Plant, Property and Equipment of RM56,000 and withdrawal of stock for personal use. The cost of the stock was RM700 while the market price was RM1,500.
- Interest income
The interest income arose on a loan amount of RM350,000 to Megah Enterprise.
- Dividend
The dividend was received from a company listed in Bursa Malaysia main board.
4. Utilities expenses
Included water and electricity deposit amounted to RM1,400 and payment of utilities for Puan Marinis house amounting RM540.
- Lease Rental
Smart Enterprise has made lease rentals in respect of the following vehicles:
| Cost of Vehicle | Lease rental per month | Accumulated lease rental on 1 January 2014 |
Toyota Camry | 210,000 | 2,450 | 58,800 |
Van | 90,000 | 550 | 21,000 |
6. Salaries and allowance
Included in the amount of salaries are as follows:
- Puan Marinis salary RM35,000
- Puan Marinis Bonus RM5,000
- Salary of 2 disable employees RM6,750
7. Donations
Cash donation amounting to RM3,800 was made to Rumah Bakti Anak Yatim while the remaining donation is for an approve charitable institution.
8. Entertainment expenses
Included in the expenses are RM8,000 to entertain the clients and the remaining expenses incurred are for the business purposes.
9. Travelling expenses
The expenses include leave passage for employees to Pulau Pangkor amounting to RM2,800.
10. Sundry expenses
This includes penalty for late submission of Puan Marinis annual tax return to IRB amounting to RM1,500
11. Office maintenance expenses
This expenses include the cost of purchasing refrigerator RM3,750 for office pantry.
12. Repair expenses
Two third (2/3) of the total repairs and maintenance cost was for business purpose.
13. Provision for doubtful debt
This included the provision for specific bad debt debts amounting to RM2,500.
14. The capital allowances for the assets acquired by Smart Enterprise prior to the start of the period is RM4,500. The capital allowances for the assets acquired during the current year are still to be calculated.
15. The balancing charge for year of assessment 2014 amounted to RM3,400.
Required:
- Calculate the total income for Puan Marini for the year of assessment 2015.
- What is the difference between capital allowance and depreciation?
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