Question 1 5. Advertisement and promotions included: Kaman Sdn Bhd was incorporated in Malaysia with a paid-up ordinary share capital of RM5 million. It is 80% owned by Malaysian citizens. Kaman Sdn Bhd's Statement of Profit or Loss for the financial year ended 31 December 2020 is shown below: Congratulatory advertisement in respect of customers Donation to non-approved institutions Market research on customer profile RM"000 150 200 320 Note RM'000 RM000 1 Revenue Cost of sales Gross profit Other income 37,000 (7,700) 29,300 2.000 27.300 2 6. Repair and maintenance included: RM 000 Replacing cement floor with tiles in administration office 44 Installing new cabinets in administration office 102 7. Professional fees included: RM000 Tax fees for the submission of YA 2019 tax return (paid in YA2020) 14 Secretarial fees for YA 2020 (paid in YA 2020) 11 Statutory audit fee 17 Less 3 8,010 4 5 2,100 2,200 490 340 8. Lease rental comprises payment for the lease of a car. The cost of the car is RM200,000. The lease commenced on 1 January 2019 and rental payment of RM20,000 was made for the year ended 31 December 2019. Kaman Sdn Bhd made another rental payment of RM20,000 for the year ended 31 December 2020. Staff costs Travelling and entertainment expenses Advertisement and promotion Repair and maintenance Professional fees Lease rental Cash donation to Government Depreciation Net Profit before taxation 6 2 7 8 20 1,000 1.530 (15,690) 11,610 Note: 1. Cost of sales includes: Payment for R&D services to an approved research institution RM125,000 9. Other information: a. During the year, Kaman Sdn Bhd received an advanced payment of RM1,100,000 from an existing customer for future supply of products. The advance payment is refundable if the customer decides not to proceed with the purchase. The advance receipt is reflected in Kaman Sdn Bhd's Balance Sheet. b Property. Plant and Equipment (PPE) owned by Kaman Sdn Bhd Qualifying Tax Written Rate of Annual Cost Down Value Allowance RM 000 RM 000 % Land 25,000 Factory 12,000 9,360 3 Plant and machinery 8,000 1,920 14 Furniture and fittings 2,500 1.000 10 Motor vehicles 3.000 20 15% of the factory area was used as administration office 2. Other income comprises the following: Gain on foreign exchange realized (non-trade) Gain on foreign exchange - unrealized (trade) Rental received from vacant land rented out to a third party Gain on disposal of property, plant and equipment Interest from fixed deposit placed in a local bank in Malaysia RM 000 263 237 53 41 302 3. Staff costs included the followings: RM 000 126 520 Salaries in respect of disabled employees Contribution to Emplovees Provident Fund (EPF) (employer's contribution at 12%) Contribution to EPF in respect of disabled employees (employer's contribution at 12%) Staff training (paid to a local resident) During the year: (1) Furniture and fittings were acquired from a subsidiary company of Kaman Sdn Bhd in Malaysia for RM300,000. This was a controlled transfer. The original cost and the tax written down value of the furniture and fittings were RM500,000 and RM250,000 respectively. () Plant and machinery costing RM150.000 was disposed of for RM110,000. The tax written down value of the plant and machinery was RM36,000 Required: Starting with Net profit before taxation, compute the tax payable of Kaman Sdn Bhd for the YA 2020, showing all the relevant adjustments including the capital allowance calculations. (Note: Every item mentioned in the notes to the accounts must be listed in your computation irrespective of whether an adjustment is required or not. Where no adjustment is required, indicate NIL' in the appropriate column) (30 marks) 14 1.125 4. Travelling and entertainment included the followings: Entertainment existing customers Cash sponsorship for customers' annual dinner Toll mileage and parking RM 000 200 160 151 Question 1 5. Advertisement and promotions included: Kaman Sdn Bhd was incorporated in Malaysia with a paid-up ordinary share capital of RM5 million. It is 80% owned by Malaysian citizens. Kaman Sdn Bhd's Statement of Profit or Loss for the financial year ended 31 December 2020 is shown below: Congratulatory advertisement in respect of customers Donation to non-approved institutions Market research on customer profile RM"000 150 200 320 Note RM'000 RM000 1 Revenue Cost of sales Gross profit Other income 37,000 (7,700) 29,300 2.000 27.300 2 6. Repair and maintenance included: RM 000 Replacing cement floor with tiles in administration office 44 Installing new cabinets in administration office 102 7. Professional fees included: RM000 Tax fees for the submission of YA 2019 tax return (paid in YA2020) 14 Secretarial fees for YA 2020 (paid in YA 2020) 11 Statutory audit fee 17 Less 3 8,010 4 5 2,100 2,200 490 340 8. Lease rental comprises payment for the lease of a car. The cost of the car is RM200,000. The lease commenced on 1 January 2019 and rental payment of RM20,000 was made for the year ended 31 December 2019. Kaman Sdn Bhd made another rental payment of RM20,000 for the year ended 31 December 2020. Staff costs Travelling and entertainment expenses Advertisement and promotion Repair and maintenance Professional fees Lease rental Cash donation to Government Depreciation Net Profit before taxation 6 2 7 8 20 1,000 1.530 (15,690) 11,610 Note: 1. Cost of sales includes: Payment for R&D services to an approved research institution RM125,000 9. Other information: a. During the year, Kaman Sdn Bhd received an advanced payment of RM1,100,000 from an existing customer for future supply of products. The advance payment is refundable if the customer decides not to proceed with the purchase. The advance receipt is reflected in Kaman Sdn Bhd's Balance Sheet. b Property. Plant and Equipment (PPE) owned by Kaman Sdn Bhd Qualifying Tax Written Rate of Annual Cost Down Value Allowance RM 000 RM 000 % Land 25,000 Factory 12,000 9,360 3 Plant and machinery 8,000 1,920 14 Furniture and fittings 2,500 1.000 10 Motor vehicles 3.000 20 15% of the factory area was used as administration office 2. Other income comprises the following: Gain on foreign exchange realized (non-trade) Gain on foreign exchange - unrealized (trade) Rental received from vacant land rented out to a third party Gain on disposal of property, plant and equipment Interest from fixed deposit placed in a local bank in Malaysia RM 000 263 237 53 41 302 3. Staff costs included the followings: RM 000 126 520 Salaries in respect of disabled employees Contribution to Emplovees Provident Fund (EPF) (employer's contribution at 12%) Contribution to EPF in respect of disabled employees (employer's contribution at 12%) Staff training (paid to a local resident) During the year: (1) Furniture and fittings were acquired from a subsidiary company of Kaman Sdn Bhd in Malaysia for RM300,000. This was a controlled transfer. The original cost and the tax written down value of the furniture and fittings were RM500,000 and RM250,000 respectively. () Plant and machinery costing RM150.000 was disposed of for RM110,000. The tax written down value of the plant and machinery was RM36,000 Required: Starting with Net profit before taxation, compute the tax payable of Kaman Sdn Bhd for the YA 2020, showing all the relevant adjustments including the capital allowance calculations. (Note: Every item mentioned in the notes to the accounts must be listed in your computation irrespective of whether an adjustment is required or not. Where no adjustment is required, indicate NIL' in the appropriate column) (30 marks) 14 1.125 4. Travelling and entertainment included the followings: Entertainment existing customers Cash sponsorship for customers' annual dinner Toll mileage and parking RM 000 200 160 151