Question 1

Top Form Sdn. Bhd has the following capital allowance transactions for year ended 30 September 2022:

(a) Lorries RM 600,000

(b) Non-commercial motor vehicle Cost of Car RM160,000

The car was purchased on 1 January 2022. The deposit paid was RM10,000. The total hire purchase instalment payment consists of RM150,000 (hire purchase finance) and RM50,000 (hire purchase interest). The total sum is repayable in 30 equal monthly instalments with effect from 1 January 2022.

The car was involved in an accident on 15 September 2022 and could not be used anymore. The company received an insurance compensation of RM60,000.

c) In October 2018, Top Form purchased a new heavy machinery from Korea worth RM120,000. It made a realised gain of RM15,000. It also incurred RM7,000 freight charges to bring the machine to Malaysia. The machine was sold for RM120,000 in February 2022. The machine had a net book value of 48,000 at time of disposal.

d) On 1 July 2022, the managing director purchased a van costing RM80,000 and registered the van in the name of Top Farm. The van is used to deliver finished goods form the factory to clients of the company.

Required:

Compute the capital allowances, balancing allowance/charge and residual expenditure (if applicable) for the above transactions for year of assessment 2022.

Note: You should indicate by the use of 0 any item referred to in the question for which no entry needs to be made (10 marks)