Question 1 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: 5. Advertisement and promotions included: RM 000 150 200 320 Note RM'000 Congratulatory advertisement in respect of customers Donation to non-approved institutions Market research on customer profile 6. Repair and maintenance included: RM'000 1 Revenue Cost of sales Gross profit Other income 37,000 (7,700) 29.300 2,000 27,300 Replacing cement floor with tiles in administration office Installing new cabinets in administration office RM1000 44 102 2 3 4 8,010 2.100 2,200 5 5 6 490 Less: 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 7. Professional fees included: RM 000 Tax fees for the submission of YA 2019 tax return (paid in YA2020) Secretarial fees for YA 2020 (paid in YA 2020) 11 Statutory audit fee 17 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. 9. Other information: a. During the year, Kamar 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. 7 340 8 20 1,000 1.530 (15,690) 11,610 Tax Written Down Value RM 000 Rate of Annual Allowance % b. Property, Plant and Equipment (PPE) owned by Kaman Sdn Bhd Qualifying Cost RM'000 Land 25,000 Factory 12,000 Plant and machinery 8,000 Furniture and fittings 2,500 Motor vehicles 3,000 * 15% of the factory area was used as administration office. 9,360 1.920 1,000 Note: 1. Cost of sales includes: Payment for R&D services to an approved research institution RM125,000 2. Other income comprises the following: : RM'000 Gain on foreign exchange - realized (non-trade) 263 Gain on foreign exchange - unrealized (trade) 237 Rental received from vacant land rented out to a third party 53 Gain on disposal of property, plant and equipment 41 Interest from fixed deposit placed in a local bank in Malaysia 302 3. Staff costs included the followings: RM 000 Salaries in respect of disabled employees 126 Contribution to Employees Provident Fund (EPF) (employer's contribution at 129) 520 Contribution to EPF in respect of disabled employees (employer's contribution at 12%) 14 Staff training (paid to a local resident) 1,125 3 14 10 20 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) 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 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: 5. Advertisement and promotions included: RM 000 150 200 320 Note RM'000 Congratulatory advertisement in respect of customers Donation to non-approved institutions Market research on customer profile 6. Repair and maintenance included: RM'000 1 Revenue Cost of sales Gross profit Other income 37,000 (7,700) 29.300 2,000 27,300 Replacing cement floor with tiles in administration office Installing new cabinets in administration office RM1000 44 102 2 3 4 8,010 2.100 2,200 5 5 6 490 Less: 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 7. Professional fees included: RM 000 Tax fees for the submission of YA 2019 tax return (paid in YA2020) Secretarial fees for YA 2020 (paid in YA 2020) 11 Statutory audit fee 17 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. 9. Other information: a. During the year, Kamar 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. 7 340 8 20 1,000 1.530 (15,690) 11,610 Tax Written Down Value RM 000 Rate of Annual Allowance % b. Property, Plant and Equipment (PPE) owned by Kaman Sdn Bhd Qualifying Cost RM'000 Land 25,000 Factory 12,000 Plant and machinery 8,000 Furniture and fittings 2,500 Motor vehicles 3,000 * 15% of the factory area was used as administration office. 9,360 1.920 1,000 Note: 1. Cost of sales includes: Payment for R&D services to an approved research institution RM125,000 2. Other income comprises the following: : RM'000 Gain on foreign exchange - realized (non-trade) 263 Gain on foreign exchange - unrealized (trade) 237 Rental received from vacant land rented out to a third party 53 Gain on disposal of property, plant and equipment 41 Interest from fixed deposit placed in a local bank in Malaysia 302 3. Staff costs included the followings: RM 000 Salaries in respect of disabled employees 126 Contribution to Employees Provident Fund (EPF) (employer's contribution at 129) 520 Contribution to EPF in respect of disabled employees (employer's contribution at 12%) 14 Staff training (paid to a local resident) 1,125 3 14 10 20 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) 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